Commissioner Of Customs (Import), ... vs M/S. Pec. Ltd

[Arising out of Order-in- Original No. 856/2011(AM) dtd. 25/8/2011 passed by the Commissioner of Customs (IMP) Group-1, JNCH, Sheva]

For approval and signature:

Honble Mr. P.S. Pruthi, Member(Technical) Honble Mr Ramesh Nair, Member(Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

Commissioner of Customs (Import), Mumbai Zone-II : Appellants

VS

M/s. PEC. Ltd. : Respondent

Appearance

Shri. M.K. Sarangi, Dy. Commissioner(A.R.) for the Appellants Shri. Prashant Patankar, Consultant for the Respondent

CORAM:

Honble Mr. P.S. Pruthi, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 7/7/2015 Date of decision: /2015

ORDER NO.

Per : P.S. Pruthi

The Revenue is the appeal against impugned order-in-appeal dated 25/5/2012 passed by the Commissioner(Appeals) setting aside the order-in-original whereby the benefit of exemption Notification 21/2002 dated 1/3/2002 was denied to the appellant on the ground that DGFT notification dated 18/5/2011 removing actual user condition cannot be applied retrospectively. The appellant imported maize corn and warehoused them in the custom bonded warehouse. Thereafter they filed ex-bond bill of entry dated 21/7/2011 for clearances of the warehouse goods under Section 68 of Customs Act under import licence No. 0550002311 dated 8/7/2011 for the clearance of the goods, which are in the extracted list of import items claiming the benefit of Sr. 21 of Notification No. 21/2002-CUS dated 1/3/2002 as amended by Notification No. 42/2008CUS dated 1/4/2008, which provides exemption of this goods falling under tariff Item 1005900 on the condition that exemption applies to import under Tariff Rate Quota (TRQ) allocation certificate issued by DGFT. It is seen that vide public Notice No. 47(RE -2010)/ 2009-2014 dated 18/5/2011 DGFT announced that w.e.f. date of the notice, actual user condition will not mandatory under import of all items under Tariff Rate Quota(TRQ) scheme. Revenues appeal mainly on the ground that although the single member bench of Honble High Court of Andhra Pradesh order dated 23/1/2012 in Writ Petition No. 16349 of 2011 in the matter of Sriven Marketing held that the public notice dated 18/5/ 2011 is issued correctly, the division bench vide interim order dated 4/4/2012 in WAMP 447/2012 state operation of the single member bench.

2. Ld.A.R. appearing on behalf of the Revenue informed us that order of division bench of Honble Andra Pradesh High Court in writ petition No. 228/2012 which had dismissed the writ petition for non-prosecution and vacated earlier order of stay, has been restored and is pending for final decision. He read through detailed order of the single member bench of Andhra Pradesh High Court to explain that actual user condition relaxed by DGFT in public notice dated 18/5/2011 was wrongly done and therefore actual user condition is not deleted. He also stated that import policy is prevalent at the time of import and in the present case the goods were imported before the date of public notice fix without ex-bond clearances was done after date of public notice. He relied on the Apex Court judgment in the case of Darshan Oils Pvt. Ltd. Vs. Union of India[1995(75)ELT 32(S.C.)].

3. On the other hand, Ld. Counsel for the respondent drew our attention to the Honble Andra Pradesh High Court order in the case of the same appellant in Sriven Marketing Vs. Union of India[2012(275) ELT 39 (A.P)] which upheld validity of public notice dated 18/5/2011. He further showed us the licence under which goods were sought to be ex-bonded. To emphasized that actual user condition was not affixed on this licence. On these licenses in comparison, he showed the licence issued to the respondent for earlier period in which the actual user condition has been incorporated. Therefore he argued that once licence is issued without actual user condition the same cannot be questioned by the customs authority to refuse exemption. He relied on High Court Mumbai decision in the case of Autolight (India) Ltd. Vs. Union of India[2003(157) ELT 13(Bom.] and Honbel Apex Court decision in the case of Titan Medical Systems Pvt. Ltd. Vs. Collector of Customs, New Delhi[2003(151) ELT 254(S.C.)]. Lastly he stated that even if the Honble Andhra Pradesh High Court has recalled its order in the case of Sriven Marketing the licence will still remain valid.

4. Heard both sides and carefully considered the submissions.

5. In this case adjudicating authority denied benefit of exemption Notification to the goods imported before the issue of public notice dated 18/5/2011 which were ex-bonded after the issue of public notice. The public notice removed actual user condition in respect of subject goods. The exemption is sought under Sr No. 21 of Notification No. 21/2002. The exemption is available subject to the condition that rate of duty shall apply such quantity of imports for which importer hold tariff rate quota allocation certificate issued by the custom facilitation committee in the DGFT in accordance with the procedure as may be specified.. We find that licence number under which the goods were ex-bonded No. 0550002311 issued to the respondent for release Tariff Rate Quota for the year 2011-12. Licence does not bear any actual user condition therefore Ld. Counsel for the respondent is right in contending that custom authority could not refuse exemption on the ground that license has not been issued correctly. It is for the DGFT to examine whether the licence was issued correctly or not. We may so far to say that even presuming that the licence was not issued correctly, the importer could not held to task. Importer is not at all in the knowledge of the detail procedure followed within the office of DGFT for issue of licence. Importer held valid licence under the TRQ and therefore benefit of exemption could not be denied to the respondent. The Honble Apex Court held in the case of Titan Medical Systems Pvt. Ltd.. (supra) that once the licence is issued and not questioned by licencing authority, custom authority cannot be refused exemption on allegation that there was mis-representation. If there was any mis-representation it was for the licencing authority to take steps on that behalf. We find that in the present case that there is not even iota on doubt that there was mis-representation on the part of the respondent. Similarly in the case of Autolight (India) Ltd.(supra), it was held by the Honble Mumbai High Court that custom authorities cannot be sit in pin over the decision of licencing authority. In view of the matter we find nothing miss and held that the licence without actual user stipulation is authority for the --- by the clearance of the subject goods.

6. Ld. A.R. relied on the case of Darshan Oils Pvt. Ltd. (supra) in which it was held that import policy as prevalent at time of import is applicable. We find that DGFT vide Letter No. 01/93/180/102/AM 09/PC-2(B)/613 dated 21/9/2011 has clarified as under:

 It is clarified that in terms of Para 2.26 of FTP 2009-14, the goods imported in March, 2011 and warehoused can be cleared against TRQ authorization for the Annual Quota for the year 2011-12 granted in the month of July 2011 for which fresh bills of Entries are required to be filed after the issuance of the said TRQ Authorisation

Therefore the above judgment does not help to cause of Revenue. Only issue which remains to be examined the various decision of the Honble Andhra Pradesh High Court relied upon by both sides in view irrespective of the decision in writ appeal 228/12 which has been recalled. As per the contention of the A.R. we find that decision of the same High Court in the case of Sriven Marketing Vs. Union of India[2012(275) ELT 39 (A.P)] puts matter to the rest in favour of the appellant. Therefore we have no hesitation in rejected the appeal of the Revenue.

7. Appeal is dismissed.

(Order pronounced in court on______________)

Ramesh Nair Member (Judicial) P.S. Pruthi Member (Technical)

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