Madras High Court
M/S.Black Gold Technologies vs The Joint Commissioner Of Customs on 11 April, 2022
WP (MD) Nos.13225 & 13226 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 11.04.2022
CORAM
THE HONOURABLE MR.JUSTICE C.SARAVANAN
Writ Petition (MD) Nos.13225 & 13226 of 2021
and
W.M.P.(MD)No.10215 of 2021 in W.P.(MD)No.13225 of 2021
M/s.Black Gold Technologies,
Rep. by its Proprietor,
Mr.Anuj Bansal,
H.No.58, UP Block, Maurya Enclage,
Pitampura, Delhi – 110 034. .. Petitioner in both the W.Ps.
Versus
The Joint Commissioner of Customs,
Office of the Commissioner of Customs,
Custom House,
Thoothukudi – 628 004. .. Respondents in both the W.Ps.
Prayer in W.P.(MD)No.13225/2021:- Petition filed under Article 226 of the
Constitution of India praying for issuance of a Writ of Certiorarified
Mandamus, to call for the records pertaining to the Impugned Order-in-
Original No.5 to 11/2021, DIN 20210681OH0000621146, C.No.VIII/10/10,
14, 15, 13, 16, 17, 18/2020-ADJN, dated 29.06.2021, passed by the respondent
herein, insofar as the petitioner is concerned, quash the same as illegal,
arbitrary, unfair, unreasonable and violation of principles of natural justice and
further direct the respondent herein to re-hear and dispose off the same
considering the documents furnished by the petitioner on merits after allowing
the cross-examination of the persons requested by the petitioner and after
affording an opportunity of personal hearing.
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Prayer in W.P.(MD)No.13226/2021:- Petition filed under Article 226 of the
Constitution of India praying for issuance of a Writ of Certiorari, to call for the
records pertaining to the Impugned Order made in C.No.VIII/10/11, 10, 14,
15, 13, 16, 17, 18/2020-ADJN, DIN:20210681OH0000999EDO, dated
23.06.2021, on the file of the respondent and quash the same.
For Petitioner : Mr.A.K.Jayaraj
(in both the W.Ps.)
For Respondent : Mr.B.Vijay Karthikeyan
(in both the W.Ps.) Senior Standing Counsel
COMMON ORDER
After hearing the learned counsel for the petitioner and the learned
Senior Standing Counsel for the respondent, these Writ Petitions are disposed
of by this common order.
2.The petitioner had imported consignments of Tyres, which were
ostensibly in contravention with the Foreign Trade Policy [FTP] 2015-2020.
According to the respondent, it was a restricted item and therefore, the same
could not be cleared without a proper licence. As the petitioner was unable to
clear the same immediately, he rushed to this Court and obtained interim
orders for clearing the same.
3.The petitioner had earlier filed a batch of Writ Petitions in W.P.
(MD)No.1242 of 2020 etc. batch before this Court [Black Gold Technologies
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WP (MD) Nos.13225 & 13226 of 2021
vs. Union of India] reported in 2020 (374) ELT 507 (Mad.) and the same were
disposed of with the following observations:-
''9.The 2016 Rules contain as many as 8 schedules. Schedule 3
is in two parts. Part A contains a list of hazardous wastes applicable
for import and export with prior informed consent. Part B contains
the list of other wastes applicable for import and export and not
requiring prior informed consent. Schedule VI sets out hazardous and
other wastes prohibited for import. It is not the case of the
respondents that the imported goods in the case on hand fall under
Schedule VI. Once the application of the Schedule VI of the 2016
Rules is ruled out, the only question is whether the import of the goods
is free or restricted. Under either case, in view of the decision of the
Hon'ble Supreme Court in Atul Automations, provisional release is
very much permissible. The respondents have seized the goods under
Section 110 of the Customs Act, 1962. Therefore, Section 110A of the
Customs Act, 1962 will automatically kick in. Section 110A of the Act
reads as under :
''110A.Provisional release of goods, documents and
things seized pending adjudication - Any goods, documents
or things seized under Section 110, may, pending the order
of the adjudicating authority be released to the owner on
taking a bond from him in the proper form with such
security and conditions as the adjudicating authority may
require.''
10.Of course, the contention urged by the learned standing
counsel with reference to Rule 12 (4) r/w.Rule 15 has to be answered.
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Interestingly, this point has also been considered in Atul Automations
decision. The Hon'ble Supreme Court after referring to Rule 15
points out that the Customs Act, 1962 does not provide for re-export.
There is another decision reported in 2015 (316) E.L.T 199 (Mad)
(City Office Equipments vs. Commissioner of Customs) in favour of
the petitioners. The learned Judge after elaborate discussion of the
statutory scheme obtaining in the Customs Act, 1962, the Foreign
Trade Development and Regulation Act, 1992, Foreign Trade
(Regulation) Rules, 1993 and the earlier Hazardous Wastes Rules
concluded that despite the fact that the goods, whose import is
restricted in terms of the Foreign Trade Policy, should be construed
to be prohibited goods, there is no bar for the release of the goods.
The learned Judge also noted that it is not open to the customs
authorities to insist on re-export. This was to be done only by the
authorities specified in Schedule VII of the Hazardous and Other
Wastes (Management and Transboundary) Rules, 2016. As in that
case, in the present case also, no proceedings have been initiated by
the authorities in terms of the Hazardous Wastes Rules for directing
the petitioners to re-export the goods. This decision of the learned
single Judge was also confirmed by the Hon'ble Division Bench in the
decision reported in 2016 (336) E.L.T 199 (Mad) (Commissioner of
Customs (Sea Port-Import), Chennai vs. City Office Equipments).
11.I am therefore of the view that the petitioners are entitled to
provisional release of the goods under Section 110A of the Customs
Act, 1962. Since several decisions have been cited on either side, I
make it clear that I have chosen to follow the decision of the Madras
High Court reported in 2015 (316) E.L.T 199 (Mad) (City Office
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Equipments vs. Commissioner of Customs) which was confirmed by
the Hon'ble Division Bench in the decision reported in 2016 (336)
E.L.T 199 (Mad) (Commissioner of Customs (Sea Port-Import),
Chennai vs. City Office Equipments) and the decision of the Hon'ble
Supreme Court in Atul Automations case. Of course, the adjudication
proceedings will go on. The respondents 2 and 3 are directed to
provisionally release the goods of the petitioners by taking a bond
from them in proper form with such security and conditions as the
adjudicating authority may require. The petitioners' counsel also
prayed that they should not be levied with any demurrage and
container detention charges. The learned counsel for the petitioners
pointed out that they are entitled to waiver in view of the Handling of
Cargo in Customs Areas Regulations 2009. They would also point out
that the Union Government has also instructed that in view of the lock
down declared by the Government of India, demurrage and detention
charges ought not to be levied.
12.The learned counsel for the petitioners placed reliance on
the decision reported in 2018 (361) E.L.T 463 (Mad) (Giridhari
Homes Pvt. ltd vs. Principal Commissioner of Customs, Chennai-III)
and 2019 (367) E.L.T 972 (Mad.) (Agro 1 Stop vs. Commissioner of
Customs, Chennai-II). The said decisions are squarely applicable to
the case on hand. Therefore, the respondents are directed to assess
and permit the provisional release of the goods in question upon
payment of applicable duties of customs subject however to the
eventual adjudication. The respondents shall release the goods after
assessing and collecting the customs duty and other charges
provisionally within a period of three weeks from the date of receipt of
a copy of this order. The adjudication proceedings can go on. The
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respondents will bear in mind the usual approach adopted in the case
of provisional release of goods in terms of 110A of the Customs Act.
It is further declared that the petitioners are entitled to waiver in
view of the handling of cargo in Customs Areas Regulations 2009.
No demurrage and detention charges shall be levied on the petitioners
herein.
13.These writ petitions stand allowed. No costs.
Consequently, connected miscellaneous petitions are closed.''
4.A similar order was passed again in respect of subsequent
consignments in W.P.(MD)Nos.10513 and 10519 of 2020 [Black Gold
Technologies vs. Union of India] reported in 2020 (374) ELT 529 (Mad.).
Meanwhile, the respondent also preferred Writ Appeals in W.A.(MD)Nos.863
of 2020 etc. batch, which came to be dismissed by a Division Bench of this
Court, by a common judgment dated 29.09.2020, with the following
observations:-
''28.In the considered opinion of this Court, in the light of the
non taking of stand by the appellants/responds as to the applicability
of Hazardous and Other Wastes (Management and Transboundary
Movement) Rules, 2016 and in the light of the stand taken in the Writ
Petitions, it cannot be concluded as a restricted item, for which,
provisional release is not prohibited. It is also to be pointed out at this
juncture that the third appellant/third respondent in compliance of the
order passed in the Writ Petitions has also ordered the provisional
release, subject to various conditions.
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29.Therefore, this Court, in the light of the above facts and
circumstances and also upon consideration of the rival submissions
and independent application of mind to the entire materials placed, is
of the view that there is no error apparent in the impugned orders
passed and it also protected the interests of both parties. It is also
made clear that the claim or otherwise of the Writ Petitioner/Importer
is also subject to the out come of the adjudication proceedings, which
came to be initiated subsequent to the filing of the Writ Petitions.
30.In the result, the Writ Appeals are dismissed, confirming the
common orders dated 25.08.2020 and 03.09.2020 made in W.P.(MD)
Nos.2355, 4040, 1242, 4076, 3042, 1295, 4080, 2377 and 10822 of
2020. Consequently, connected Miscellaneous Petitions are also
dismissed. However, in the circumstances of the case, there shall be
no order as to the costs.''
5.The petitioner was thereafter issued with the impugned order in
respect of the following show cause notices:-
Show Cause Notice No. Date F.No.C.No.
07/2020 06.07.2020 VIII/48/04/2020-SIIB
08/2020 07.07.2020 VIII/48/06/2020-SIIB
09/2020 21.07.2020 VIII/48/07/2020-SIIB
10/2020 21.07.2020 VIII/48/08/2020-SIIB
11/2020 21.07.2020 VIII/48/10/2020-SIIB
12/2020 21.07.2020 VIII/48/12/2020-SIIB
13/2020 21.07.2020 VIII/48/14/2020-SIIB
14/2020 21.07.2020 VIII/48/15/2020-SIIB
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6.In support of his submissions, the learned counsel for the petitioner
relied on the following judgments:-
(i) Lakshman Exports Limited vs. Collector of Central Excise [2002
(143) E.L.T. 21 (SC)]
(ii) Arya Abhushan Bhandar vs. Union of India [2002 (143) ELT 25
(SC)]
(iii) Silicon Graphics System (India) Private Limited vs. Union of
India [2006 (204) ELT 247 (Bom)]
(iv) Commissioner of Cus. (Imports), Chennai – 1 vs. Sainul
Abideen Neelam [2014 (300) ELT 342 (Mad.)]
(v) Black Gold Technologies vs. Union of India [2020 (374) ELT 507
(Mad.)]
(vi) Black Gold Technologies vs. Union of India [2020 (374) ELT
529 (Mad.)]
7.The learned Senior Standing Counsel for the respondent submits that
the Writ Petitions are devoid of merits and placed reliance on a decision of this
Court in Jet Unipex vs. Commissioner of Customs, Chennai reported in
2020 (373) E.L.T. 649 (Mad.). He submits that it is not mandatory to extend
the benefit of cross-examination of Mahazar Witness or the Officers, who
investigated the case.
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8.The learned Senior Standing Counsel for the respondent further
submits that the petitioner has imported cut Tyres at Tuticorin Port for setting
up a factory in Tamil Nadu at Tuticorin. However, till date, no factory has
been set up. It is submitted that during the course of investigation, the
petitioner had stated that the imported Tyres were meant for the manufacture
of Rubber Crumb and Granules and that a factory had been set up in
Rajasthan.
9.The learned Senior Standing Counsel for the respondent further
submits that the jurisdictional authorities were requested to search the
premises of the importer at Delhi and Jaipur at Rajasthan. The Joint
Commissioner, Jaipur, vide Letter F.No.VIII (48)/27/Inv./Prev./2020/1004,
dated 03.03.2020, informed that there was no factory named 'M/s.Black Gold
Technologies' functioning at the above said address. On enquiry with Shri
Subhash Chand, Proprietor of M/s.Anju Plastics, it revealed that they never
imported Tyres till date. The search was conducted as per Section 105 of the
Customs Act, 1962. The object of Section 105 of the Customs Act, 1962 is to
search for the goods liable to be confiscated or recovery of documents secreted
in any place, which are relevant to any proceedings under the Customs Act.
During search proceedings, search Panchanama was drawn by the Customs
Officers in the presence of two independent witnesses. The person of the
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authorized officials and witnesses may be offered for search before initiating
the search so as to avoid suspicion that any member has surreptitiously planted
the things recovered in the search. The Officers of Customs Department must
call upon two or more witnesses, who are respectable inhabitant of the locality,
wherein the premise is situated. The list of all the things recovered during
search must be inventorized as to wherefrom they were recovered and must be
signed by the witnesses. The Officers have found that M/s.Anju Plastics, is a
Proprietorship Firm and registered at No.H-943, Khushkhera Industrial Area,
Tijara Alwar, Rajasthan and they have never imported Tyres till date and they
have purchased the aforesaid land from Shri Pawan Chauhan in November
2019. The above facts have been elaborated in the show cause notice. Instead
of producing evidences for their ownership and existence of their factory in
the given address, the importer has contested that various Government
Agencies, who have issued certificates such as, MSME Certificate, GST
Registration Certificate, dated 29.09.2017, Certificate dated 03.05.2017 and
authorization issued by Rajasthan State Pollution Control Board for
functioning of their Company at the said premises.
10.The learned Senior Standing Counsel for the respondent further
submits that the Proprietor of the petitioner named, Shri Anuj Bansal was also
summoned and required to appear before the Superintendent of Customs
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[SIIB] on 05.03.2020 and he tendered a voluntary statement to the effect that
M/s.Black Gold Technologies, New Delhi, was started only during the year
2017 and that they are in the business of manufacturing Rubber Crumbs and
Granules in their factory named, 'M/s.Black Gold Technologies' and that they
have planned to set up a Unit in Tuticorin, for manufacturing of Rubber
Crumbs and Granules and that they have collected the details of the Customs
Broker namely, M/s.Indian Shipping and Logistics Facility Pvt. Limited,
Tuticorin, through online and UK forwarders M/s.Amdip Traders Limited
specifically recommended M/s.Indian Shipping and Logistics Facility Private
Ltd., Tuticorin. It is submitted that the goods were imported from the United
States of America.
11.The learned Senior Standing Counsel for the respondent further
submits that the documents, which were produced by the petitioner, were
relating to the permission granted by the Rajasthan State Pollution Control
Board. All the documentary evidences produced by the importer for existence
of their Company have been issued prior to November 2019, i.e., date of
registration of M/s.Anju Plastics in the above said address. The import of used
rubber tyres has taken place during January and February 2020. Hence, the
onus is on the importer to substantiate that their factory has been functioning
in the address mentioned above till now and the imported goods would be
processed further in their factory itself.
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12.In support of his submissions, the learned Senior Standing Counsel
for the respondent also relied on the following decisions:-
(i) Stalin Joseph, S/o.Sebastian, 9A, BB Road, Perambur, Chennai
-39 vs. The Commissioner of Customs (Airport), New Customs House, All
Cargo Complex, Meenambakkam, Chennai – 600027 [2021-TIOL-587-
HC-MAD-CUS]
(ii) Roshan Overseas, Rep. by its Proprietor, Usman Abdul Noble
vs. Commissioner of Customs, Customs House, Tuticorin and another
[2018 (2) CWC 588]
13.By way of rejoinder, the learned counsel for the petitioner submits
that the impugned order has been passed without giving breathing time to the
petitioner to give response to the earlier order rejecting the request for cross-
examination. It is submitted that the order rejecting the request for cross-
examination was made on 23.06.2021 and thereafter, the impugned order has
been passed on 29.06.2021. It is submitted that thus the impugned orders have
been passed in gross violation of principles of natural justice.
14.I have considered the arguments advanced by the learned counsel for
the petitioner and the learned Senior Standing Counsel for the respondent and
perused the impugned order dated 23.06.2021, passed by the respondent
rejecting the request of the petitioner for cross-examination.
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15.The said order has been passed on the strength of the decision of the
Hon'ble Supreme Court in the case of Surjeet Singh Chhbra vs. Union of
India and others reported in 1997 (89) ELT 646 (SC) : 1997 (1) SCC 508.
The impugned order dated 29.06.2021, has been passed within six days from
the date of the above said order. The information that is gathered by the
respondent during investigation is meant only for ascertaining the facts. It is
not necessary for the Department to inform the sources of the information. It
is required for the Department to issue show cause notice articulating the
proposal in the show cause notice for imposing the penalty. If the Department
relies on any statement of any Officer or a Mahazar witness, then, it is for the
Department to produce such Officers or Mahazar witness for cross-
examination. This is the summation of Jet Unipex's case [supra], where the
decision of the Hon'ble Supreme Court in Andaman Timber Industries vs.
Commissioner reported in 2015 (324) ELT 641 (SC) was also considered.
The Department has to decide the case on preponderance of probability as to
whether the petitioner had a probable case for justifying the import as freely
imported goods under Chapter 4004 [Sub Head:- 4004 00 00].
16.In this case, the import is from the United States of America. It is not
clear why the import has been made through Tuticorin Port, in the tip of the
Peninsula in the Bay of Bengal. If the petitioner's case is that the import was
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made for their factory in Rajasthan, the petitioner would have chosen other
Ports, which are nearer to Rajasthan either in Gujarat or in Maharashtra or in
Goa or in Kerala on the Western Coasts. This needs to be properly explained
by the petitioner. If the petitioner indeed operates a factory in Rajasthan, it is
open for the petitioner to file a copy of the GST Registration of the factory and
details of documents to substantiate that the petitioner had indeed
manufactured the Rubber Crumbs and Granules and sold to various
Contractors/statutory authorities engaged in laying of roads. These are the
documents which the petitioner is required to produce before the authorities to
substantiate that the imported goods do not fall within the purview of
restrictions in the Foreign Trade Policy 2015-2020. This exercise has not been
carried out. Under these circumstances, the impugned orders are quashed and
the cases are remitted back to the respondent to pass a fresh order within a
period of three months from the date of receipt of a copy of this order. The
petitioner is entitled to rely on any of the documents and collateral evidence,
which may be available with it. The respondent shall proceed to pass orders
by applying the principles of preponderance of probability. It is made clear
that the respondent is not required to rely on any of the Mahazar witness or
officials of the counterparts in Rajasthan before passing order. If the petitioner
is unable to discharge the burden of proof, that is required, the respondent can
proceed to pass appropriate orders based on the available materials.
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Admission of the petitioner in the statement would be a relevant factor
available for the Department while passing such orders.
17.These Writ Petitions stand disposed of in terms of the above
observations. No costs. Consequently, connected Miscellaneous Petition is
closed.
11.04.2022
Index : Yes/No
smn2
To
The Joint Commissioner of Customs,
Office of the Commissioner of Customs,
Custom House,
Thoothukudi – 628 004.
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WP (MD) Nos.13225 & 13226 of 2021
C.SARAVANAN, J.
smn2
Common order in
WP (MD) Nos.13225 & 13226 of 2021
11.04.2022
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