Registration under Accredited Client programme - validity of eligibility conditions

PJ/Case Laws/2012-12/1019

Case: SHAH PULP & PAPER MILLS LTD. vs. UNION OF INDIA

Citation: 2012 (276) E.L.T. 289 (Bom.)

Issue:- Exim – Condition of no case of excise and customs for registration under Accredited Client Programme – validity of.

Brief Facts:- Petitioner is an importer. He wanted to get registration under accredited client programme. According to the Condition 7(iii) of C.B.E. & C. Circular No. 42/2005-Cus, Dated 24-11-2005 prior to its amendment and after amendment the Petitioner has not fulfilled the above said condition, therefore, was held not eligible to register under accredited client programme.

Further, the Petitioner has filed his appeal wherein also it was held that the continued maintenance of a required compliance level is an essential condition for enjoying the benefits of the scheme which the petitioner failed to demonstrate even before the grant of ACP scheme.

Pettioner’s Contention:- Since, the Petitioner is required to challenge to the validity of the condition no. 7(iii) of the above said circular. The Petitioner submitted that the condition 7(iii) of the said Circular is in violation of Article 19(1) (g) of the Constitution to carry on business. He, further, submits that booking of cases in against does not result in denial of the ACP scheme/ facility. According to him, the case is to be serious imposing hardship in carrying on business irrespective of the nature of the case. After the Assistant commissioner, the aggrieved Petitioner has approached to the Court.

Respondent’s Contention:- The Assistant Commissioner submitted that Risk Management System seeks to strike an optimal balance between the concerns of facilitation on the one hand and enforcement on the other. Under ACP, registered importers are allowed to clear large number of consignments only on the basis of self assessment basis and filing a declaration without any physical examination. This facility is available to importers who have good track record of compliance with laws not only custom laws, rules and regulations but also includes Exim policy framed by Director General of Foreign Trade and various allied laws which are governed by Custom or other Government department.

Reasoning of Judgment:- On 24 Nov, 2005 the Central Board for Excise and Customs issued a Circular through which a major part of accredited client scheme i.e. Risk Management System has been introduced. The main purpose of the programme is to provide the facilitation to those importers who have demonstrated a capacity and willingness to comply with laws of Customs as applicable. According to this programme, the importer who has registered in the scheme is entitled to clear his goods on self assessment basis and by filing a declaration except where intelligence is required. This benefit is given to importers who have a track record of high compliance of laws. An importer who has not registered under ACP then he would clear goods on the basis of normal procedure.

According to originally introduced condition 7(iii) of the above said circular, importer will be eligible for registration ACP only when there is no case booked against him under Customs, Central Excise or Service tax in the previous three financial years. In case, cases are booked against him atleast show cause notice should be there. After amendment in the same on 20.08.2010, cases means in the condition as cases of the nature of evasion of duty, misdeclaration, misstatement, willful suppression and fraudulent intention or the like. Thus, the condition which has been imposed in paragraph 7(iii) are not regarded as arbitrary and bears sufficiently nexus with this object.

In case of show cause notice issued, Jurisdictional Authority is entitled to call for relevant disclosure from importers pertaining to show cause issued, orders in original and current status of case. Instead of approaching high court the Petitioner/importer may respond to it by disclosing all relevant information C.B.E. & C. Circular No. 42/2005-Cus. dated 24-11-2005

Decision:- Petition dismissed.

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PJ/Case Laws/2012-12/1019

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