Madras High Court
M/S.Ramsays Corporation Private ... vs The Commissioner Of Customs on 1 March, 2022
Writ Appeal No.407 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 01.03.2022
CORAM :
THE HONOURABLE MR. JUSTICE S.VAIDYANATHAN
AND
THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ
Writ Appeal No.407 of 2022
M/s.Ramsays Corporation Private Limited,
(rep. by its Managing Director, R.Krishnakumar),
No.18, Lodd Govindass Nagar Road,
Mount Road, Chennai 600 002. ... Appellant
vs.
The Commissioner of Customs,
Chennai-IV Commissionerate,
Custom House,
No.60, Rajaji Salai,
Chennai 600 001. ... Respondent
Writ Appeal filed under Clause 15 of Letters Patent against the order
dated 07.01.2022 passed by this Court in W.P.No.24567 of 2021.
For Appellant : Mr.A.Mohamed Ismail
For Respondent : Mr.R.Gunaalan,
Jr. Standing Counsel for Customs & GST
*****
Page No.1 of 9
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Writ Appeal No.407 of 2022
JUDGMENT
(Judgment of the Court delivered by MOHAMMED SHAFFIQ, J.)
This intra-Court Appeal is filed by the Writ Petitioner challenging the
order dated 07.01.2022 passed by the learned Single Judge in W.P.No.24567
of 2021.
2. The Appellant/Writ Petitioner had availed the Export Promotion
Capital Goods (EPCG) Scheme, whereby, the Appellant was permitted to
import machinery with a total assessable value of Rs.3,61,48,776/- with 'nil'
rate of BCD. The duty that was foregone worked out to Rs.86,37,700/-. The
above said EPCG Authorisation was issued subject to the condition that, the
importer had to fulfill the export obligation as prescribed in the above said
Notification read with the conditions of EPCG Authorisation. In terms of the
EPCG Scheme, the Appellant had to discharge the export obligation on or
before 15.11.2016.
3. It is the submission of the Appellant that, they had discharged the
export obligation in terms of EPCG Scheme. After completion of the said
export obligation, the Appellant had submitted copies of shipping bills, Bank
certificate, Chartered Accountant Certificate and other relevant documents as
annexure to letter dated 03.03.2014, which was duly acknowledged by the
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Writ Appeal No.407 of 2022
office of the ADGFT. However, there was delay in obtaining Export
Obligation Discharge Certificate (EODC), despite the fact that, the process of
issuance of EODC was underway with the Office of the DGFT.
4. In the meanwhile, a Show Cause Notice dated 11.06.2021 was
issued by the 1st Respondent proposing to confiscate capital goods imported
under EPCG Scheme apart from demanding duty for non-fulfillment of
Export Obligation along with applicable interest and penalty on the premise
that the Appellant had failed to fulfill the Export Obligation and produce the
Export Obligation Discharge Certificate (EODC) from the concerned
ADGFT. The Appellant appeared for personal hearing and also filed their
written objections. The Appellant, after submitting the documents to ADGFT
on 03.03.2014, had thereafter sent reminders to ADGFT on 20.11.2017 and
01.07.2021, for issuance of Export Obligation Discharge Certificate (EODC)/
letter of redemption. There was delay on the part of the ADGFT to issue the
Export Obligation Discharge Certificate (EODC)/letter of redemption. The
1st Respondent proceeded to confirm his proposal on finding that the
ADGFT had issued deficiency letters on 23.01.2019 and 12.07.2021, which
were not cured by the importer.
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Writ Appeal No.407 of 2022
5. We find that, subsequent to the passing of the impugned order,
Redemption Letter/Export Obligation Discharge Certificate (EODC) dated
27.10.2021 has been issued by the Assistant Director General of Foreign
Trade, Chennai, which would clearly indicate that, the Petitioner had
discharged the entire Export Obligation in compliance with the EPCG
Scheme.
6. There can be no dispute about the fact that, the Appellant had
discharged their Export Obligation, as would be evident from the
Redemption Certificate issued on 27.10.2021. The production of Export
Obligation Discharge Certificate (EODC) in terms of EPCG scheme is
necessary for the importers to claim benefit under the said Scheme and delay
in producing the Export Obligation Discharge Certificate (EODC) cannot
result in denial of the benefit, more so, when the assessee/importer has
admittedly discharged the Export Obligation and has also furnished the
requisite documents before the appropriate authority for issuance of Export
Obligation Discharge Certificate (EODC). A condition which is dependent
on action by public authorities over which an assessee/importer has no
control and, delay on the part of a public authority cannot result in denial of
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Writ Appeal No.407 of 2022
the benefit extended in larger public interest. Thus, the delay in obtaining
Export Obligation Discharge Certificate (EODC) cannot result in denial of
benefit under the EPCG Scheme, which itself has been formulated to promote
export and earn foreign exchange. In this regard, it may be relevant to refer
to the judgment of the Hon'ble Supreme Court in the case of Commissioner
of Customs (Imports) v. Tullow India Operations Ltd., reported in (2005) 13
SCC 789, relevant portion of which, is extracted hereunder:
"21. Both the importers are licensees.
Indisputably, they were entitled to the benefit of the
exemption notification subject, of course, to the
condition that they would produce the essentiality
certificate granted by the Directorate General of
Hydrocarbons at the time of importation of goods. Grant
of essentiality certificate was not in the hands of the
assessees. It was the function of a department of the
Central Government. The essentiality certificate
admittedly was not granted by the Directorate General
of Hydrocarbons within a reasonable time. The
importers could not be blamed therefor. It is possible
that delay in granting the said essentiality certificate was
by way of default on the part of the authorities
concerned.
..........
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Writ Appeal No.407 of 2022
26. The Directorate General of Hydrocarbons is
under the Ministry of Petroleum and Natural Gas of the
Government of India. The functions performed by it are
public functions. The notification never contemplated
that a public functionary, having regard to the
importance of the subject-matter and in particular when
such importations are being made in public interest,
would not dispose of the application for grant of
essentiality certificate within a reasonable time so as to
enable the importer to avail the benefit thereof.
Applicants for grant of such certificates, having regard
to their importance, should have been processed by the
Directorate General of Hydrocarbons as expeditiously as
possible but they did not choose to do so probably
having regard to the fact that no time schedule therefor
was prescribed. It is trite that when a public functionary
is required to discharge its public functions within a
time specified therefor, the same would be construed to
be directory in nature. (See P.T. Rajan v. T.P.M. Sahir
[(2003) 8 SCC 498] and Punjab SEB Ltd. v. Zora Singh
[(2005) 6 SCC 776] .)"
7. The above judgment has also been followed in the case of
O.N.G.C. Limited vs. Commissioner of Customs, Mumbai reported in
(2006) 7 SCC 403. Importantly, the above principle was also applied by the
Hon'ble Supreme Court while construing an Exemption Notification in the
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Writ Appeal No.407 of 2022
case of Mangalore Chemicals reported in (1992) Supp 1 SCC 21, which
stands approved by the decision of the Constitution Bench of the Hon'ble
Supreme Court in Dilip Kumar case reported in (2018) 9 SCC 1.
8. In the present case, the Appellant has discharged their Export
Obligation and the same is also evident from the Redemption Letter dated
27.10.2021 and that, the delay in obtaining the same from ADGFT ought not
result in denial of the benefit under EPCG Scheme.
9. In view of the same, the Respondent's order dated 30.07.2021
impugned in W.P.No.24567 of 2021, is set aside and the Appellant/Writ
Petitioner is permitted to produce the documents in support of their claim to
demonstrate that, their export obligation has been discharged, within a period
of eight weeks from the date of receipt of a copy of this judgment.
In fine, the Writ Appeal is allowed on the above terms. No costs.
Consequently, connected C.M.P.No.3103 of 2022 is closed.
[S.V.N., J.] [M.S.Q., J.]
01.03.2022
Index : Yes/No
Speaking Order : Yes/No
(aeb/mka)
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Writ Appeal No.407 of 2022
To:
The Commissioner of Customs,
Chennai-IV Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai 600 001.
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Writ Appeal No.407 of 2022
S.VAIDYANATHAN, J.
and
MOHAMMED SHAFFIQ, J.
(aeb)
Judgment in
W.A. No.407 of 2022
01.03.2022
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