Can Permission of factory stuffing of Export goods are denial on the grounds that case booked earlier on another sister concern of the appellant who was situated on same premises??

PJ/Case Laws/2011-12/1135

Prepared by
CA Rajani Thanvi
Bharat Rathore

Case: Rajguru Enterprises Pvt. Ltd. Vs Commr. Of Cus. (Export), Raigad.

Citation:2011 (266) E.L.T. 286 (Tri.-Mumbai)

Issue: Can Permission of factory stuffing of Export goods are denial on the grounds that case booked earlier on another sister concern of the appellant who was situated on same premises??

Brief Facts: The appellant is manufacture exporter had requested for factory stuffing permission at their premises as per circular no. 60/2001-Cus. The permission was denied relying on the negative report submitted by the concerned authority. The appellant filed appeal against the order before Tribunal and Tribunal remanded the matter back to the adjudicating authority. The adjudicating authority denied the factory stuffing permission and passed order against appellant on the ground that this factory premise is the same premise where appellant’s sister concern is operating and case had been booked against that firm for fraudulent export wherein (the father of the Director of the Appellant Firm) is Director. However appellant and his sister concern firm is having shares. Aggrieved by the said order the appellant is in appeal before Tribunal.

Appellant’s Contention: The appellant submit that it is an admitted fact that there was a case of fraudulent export against M/s RIIPL wherein the father of the Director of the appellant firm is a Director but in the case booked by the department, father of appellant was exonerated by Tribunal and found that father of appellant is not involved in any fraudulent case. Hence, the denial of factory stuffing permission is totally on irrelevant ground. Father of Appellant and the appellant firm are two different entities and there is no bar under Customs law that two firms can not run from the same premise. Hence, the ground that the appellant firm is working from the same address where M/s. RIIPL Located is also totally irrelevant.

Respondent’s contention:- The respondent submit that denial of factory stuffing permission is an administrative order which is not challengeable before Tribunal. The respondent also submit that Father of Director of appellant firm is having interest in the appellant by way o acquiring shares in appellant firm hence the factory stuffing permission has rightly denied. The Respondent also relying upon various cases.

Reasoning of Judgment: - The hon’ble tribunal heard both side and considered that there are two issue in this case first issue is whether the impugned order is of an administrative order or a quasi judicial order. In this regard the Hon’ble Tribunal find that if any order passed against any representation made by the assessee, the same become quasi judicial order and appealable order. The reliance placed by the respondent is not relevant to the facts of this case.

Second issue is that father of the director of the appellant firm having shares in the appellant firm. As per law, Father of the director of the appellant firm and M/s RIIPL are two Different legal entities. And Father of the director of the appellant firm has already been exonerated. If he having any share in the appellant firm that does not make any adverse binding on the appellant firm. As per Customs law, there is no bar to run two firms from the same address, denial of permission of factory stuffing on that premise is also not sustainable

Judgment:Appeal allowed and impugned order set aside with consequential relief.

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PJ/Case Laws/2011-12/1135

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