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R.K. Digital Solutions v/s Union of India & Others

    Writ Petition No. 3736 of 2020

    Decided On, 30 April 2020

    At, High Court of for the State of Telangana

    By, THE HONOURABLE MR. JUSTICE M.S. RAMACHANDRA RAO & THE HONOURABLE MR. JUSTICE T. AMARNATH GOUD

    For the Petitioner: Srinivas Chaturvedula, Advocate. For the Respondents: Namavarau Rajeshwar Rao, Advocate.



Judgment Text


M.S. Ramachandra Rao, J.

1. Petitioner herein is a partnership firm engaged in internal trade in various commodities by way of imports and exports.

2. It imported certain quantity of gold granules vide six bills of entry, details of which are annexed in Annexure P.2.1.

3. The petitioner classified the said imported goods under CTH No.7108 1300 of the Customs Tariff Act and claimed exemption from payment of Customs duty in terms of Sl.No.966 of the table to Notification No.82 of 2018- Cus dt.31-12-2018 amending Notification No.46/2011 dt.01-06-2011.

4. Petitioner contends that as per the said Notification as amended, goods imported from Indonesia falling under chapter sub-heading 71081300 of Customs Tariff, qualify for concessional rate of duty of customs at 0% during the material period of import under the subject six bills of entry (05-04-2019 to 03-05-2019).

5. The exemption from customs duty admittedly is subject to fulfillment of condition laid down in the said notification, which requires the importer to prove the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, that the goods in respect of which the benefit of this exemption is claimed are of the origin of countries as mentioned in Appendix-I thereat, in accordance with the provisions of the Customs Tariff (Determination of Original of Goods under the Preferential Trade Agreement between the Governments of Member States of the Association of South East Asian Nations (ASEAN) and the Republic of India) Rules, 2009, published in the Notification of the Government of India, Ministry of Finance (Department of Revenue) No.189/2009- Customs (N.T) dt.31-12-2009.

6. Petitioner contends that it had submitted to the Customs authorities, the Country of Origin Certificates required for claiming the duty exemption at the time of import itself, which are annexed to the Writ Petition as P.2.1/P-5.1 to P-5.6, and contended these certificates were issued by the competent office in Provinsi DKI Jakarta, Indonesia.

7. Petitioner also contended that the respondents insisted for submissions of Bank Guarantee covering 100% of the duty exempted despite the petitioner submitting the certificates of Country Origin issued by the competent authority and despite the Central Board of Excise and Customs vide Circular No.38/2016 dt.22-08-2016; and on the insistence of the respondents it had executed a provisional duty bond supported by 100% Bank Guarantee from a Scheduled Bank to cover the exempted duty for provisional assessment of the subject Bills of Entry and release of goods.

8. Petitioner contended that under duress, he had furnished Bond and Bank Guarantee for each of the consignments imported under the six bills of entry, so as to clear the goods in time and to avoid demurrage and price fall risk. The details of Bonds and Bank Guarantees furnished are attached as Annuxre-P-2.1/P-7.1 to P-7.6.

9. It is not in dispute that the respondents had sought to make a retroactive check in February, 2020 vide. Jak/Com/217/2/2016(19) from the competent authority in Indonesia regarding the goods covered by the 6 Bills of Entry, and vide Ref.No.2/Verification-Jkt/2/2020 dt.11.2.2020 and Ref.No.2/Verification-Jkt/2/2020 dt.11.2.2020, the competent authority of the Indonesian Government had confirmed that the goods originated in Indonesia only.

10. Petitioner contends that respondents are obligated to return the Bank Guarantees given by the petitioner in the light of above referred verifications issued on 11-02-2020 by the Competent Authority of the Government of Indonesia in respect of the subject Bills of Entry, copies of which are now been placed on record by the counsel for the petitioner.

11. He also relied upon the Order passed by this Court on 03-02-2020 in W.P.No.1356 of 2020.

12. He also contended that as per Rule 7(c) of the Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement Between Governments Member States of the Association of South-East Asian Nations (ASEAN) and the Republic of India) Rules, 2009 notified on 31-12-2009, where an AIFTA certificate of origin is not accepted by the Customs Authority of the importing party, such AIFTA certificate of origin shall be marked accordingly in box 4, and the Original AIFTA certificate of origin shall be returned to the issuing authority within a reasonable period, but not exceed two months (sixty days); and that as per Rule 16(a)(ii) of the said Rules, the retroactive check is statutorily required to be completed within three months from the date of such request.

13. According to the petitioner the maximum period contemplated under the said Rules for initiating and contemplating retroactive check of the certificate of origin is five months, but in the instant case the respondent had not even initiated any such retroactive check within the maximum time period of two months. It is contended that even if request is initiated by respondents, it would be futile.

14. Petitioner contends that he had submitted a detailed representation on 18-01-2020 to the Deputy Commissioner of Customs (Imports), Air Cargo Complex, Shamshabad Airport (4th respondent) with a copy marked to the 3rd respondent requesting for return of Bonds and Bank Guarantees furnished by him since he came to know as to the non sending of request for retroactive verification as per the order dt.9.12.2019 under the RTI Act.

15. Sri B.Narasimha Sarma, learned Senior Counsel for Commercial Taxes states that in view of the verification certificates issued on 11.2.2020 by the Indonesian Government, now produced by the petitioners, the petitioner is entitled to release of the Bank guarantees furnished by it.

16. In view of the same, we are of the opinion that it is the duty of the respondents to complete the provisional assessment and also return the Bank Guarantees given by the petitioner towards the exports made by it under the Bills of Entry referred to above since th

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ere is no dispute now about the Country of origin of the goods in question. 17. Therefore, respondents are directed to (i) release six Bank Guarantees furnished by the petitioner on or before 4.5.2020 since the petitioners have given Bonds for the goods covered by the 6 Bills of Entry, and (ii) also complete the provisional assessments in respect of the said Bills of Entry within a period of three (03) months from the date of receipt of a copy of this order and communicate their deposition to the petitioner. 18. The Writ Petition is allowed with the above directions. No costs. 19. Pending miscellaneous petitions, if any, shall stand closed.
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