Whethernon-reliance on the Certificate of Disposition as a proof of re-exportation was justified?

PJ/Case Laws/2012-13/1528

Case:- FEDERATION OF I.C.C. & INDUSTRY VS UNION OF INDIA

Citation:- 2013(289) E.L.T. 438 (Tri.-Del)

Brief Facts:-This writ petition challenges an order dated 15-2-2011 by the Department of Revenue (the first respondent), the appellate order dated 21-8-2009 by Commissioner of Customs (Appeals) (the second respondent), and the order-in-original dated 29-4-2009 by Deputy Commissioner of Customs (the third respondent). All three authorities held that the petitioner ("FICCI") is liable for payment of Rs. 4,85,735/- as Customs Duty and Rs. 9,714/- as Education CASs, and interest thereon as applicable under Section 28AB of the Customs Act, 1962 (the Act).

In exercise of the powers conferred by Section 25(1) of the Customs Act, the Central government by Notification No. 157/90-Customs, dated 28th March, 1990, gave effect to the "ATA Garnet System" in terms of the ATA Convention. The ATA Carnet system is an international customs document that allows the holder to temporarily (up to one year) import goods without payment of normally applicable duties and taxes, including value-added taxes. The Carnet eliminates the need to purchase temporary import bonds. As long as the goods re re-exported within the allotted time frame, no duties or taxes are due. Failure to re-export all goods listed on the Carnet results in the need to pay the applicable duties. Failure to remit those duties results in a claim from the foreign customs service to the importer's home country. As per the relevant notification in this case, the movement of goods covered under the ATA Carnet System is controlled by endorsements made on the ATA Carnet by the guaranteeing association for ATA Carnet in India. The petitioner is the guaranteeing association for ATA Carnet in India. The notification exempts the goods covered under the ATA Carnet system which are imported into India, from the whole of the duty of customs leviable thereon. The notification issued by the Central Government requires that the said goods be re-exported back within a period of six months from the date of importation. In case of failure to do so, the customs duty leviable on the goods as on the date of clearance shall be paid by the guaranteeing association i.e. the petitioner.

The present case relates an ATA Carnet, i.e. No. US 89/05-64919 issued by the United States Council for International Business (USCIB), the national issuing and guaranteeing association for in the US, to M/s. E.G. Lawrence Inc. One Mr. D. Cowen, representative of the Carnet holder, entered into India with the goods on 13-8-2006 through the IGI Airport, New Delhi and returned on 15-9-2006. On 13-4-2007, the petitioner received a letter from Customs Department stating that they had no record of re-exportation of the goods imported under the said Carnet. After considering the petitioner's representation, the Deputy Commissioner of Customs by order dated 29-4-2009 levied the impugned customs duty along with education cess and interest on the petitioner. Being aggrieved with this order, the petitioner filed an appeal before the Commissioner of Customs (Appeals), New Delhi which also rejected the same. Thereafter, the petitioner filed a revision application under Section 129DD of the Act with the Department of Revenue, Ministry of Finance, Government of India, which also was unsuccessful. Thus, this writ petition.

Appellant Contentions:-The Appellant submits that after having received the show cause notice, it took up the matter with USCIB in USA requesting them to submit proof of re-exportation against the said Carnet. Since the matter was quite old, the USCIB could not trace out in its record the proof of re-exportation of the goods against the Carnet. However, to verify that the goods had, in fact, been re-exported back to the US from India, the Carnet holder, furnished, through USCIB a "Certificate of Disposition" in respect of the said Carnet. This certificate, counsel for the petitioner claimed, was valid proof of re-exportation under Article 8 of the ATA Convention. Counsel further stated that by the time this Certificate of Disposition could be arranged, the matter had already been adjudicated by Customs Department. Counsel further submitted that this Certificate of Disposition was produced as a proof of re-exportation before all the three respondents; however, all three authorities did not give any weight to it, and denied the petitioner the deserved relief.
Respondent Contentions:-Counsels for the respondents 1-3, on the other hand, raised the common argument that no fault could be found with the three impugned orders. It was contended that the orders were valid in law, and that the non-reliance on the Certificate of Disposition as a proof of re-exportation was justified. It was argued that the petitioner did not produce any of the materials or documents to show that the Carnet covered the same goods, which were covered by the certificate furnished during the proceedings. Therefore the Deputy Commissioner and the Appellate Commissioner acted reasonably in holding that there was no record or material to justify a finding that the carnet was filed in accordance with the agreed procedure.

Reasoning of Judgment:-We have considered the record from both parties and perused the record, we observed that in connection with the proof of re-exportation, the third Respondent noted as follows:
"Careful examination of this certificate reveals that this certificate pertains to ATA Carnet No. US 89/07-60057 and not to the one under dispute i.e. Carnet No. US 89/05-64919. The evidence in support of re-export of the goods under Carnet No. US 89/05-64919, thus, still remains elusive. On the other hand, the United States Council of International Business (Counter part of FICCI in USA) have, in their communication dated 4-10-2007 with FICCI, clearly acknowledged that they could not provide any copy of the original Carnet No. US 89/05-64919 as the same was not returned to them by the holder of the Carnet nor did they have any copy of the said Carnet. More so, the United State Council for International Business, in their "Evidence letter dated 20-11-2007 to Foreign Guaranteeing Association" (addressed to FICCI) have implicitly expressed their willingness to regularize the dispute and if payment is required the same be communicated to them. In this evidence letter dated 20-11-2007 too, I do not find anything that goes to prove re-exportation of the goods imported under Garnet 89/05-64919.
Thus, under the facts and circumstance of the case as they are, I am not inclined to accept with the certificate of disposition or the evidence letter dated 20-11-2007 from the United State Council for International Business, in support of re-exportation of the goods concerned under ATA Carnet No. US 89/05-64919 as the same do not contain any evidence to the said effect.”

This view was confirmed by Respondent no. 1. Respondent no. 2, in its order, did not even mention that the Certificate of Disposition had been produced as alleged proof of re-exportation.

The Certificate of Disposition was produced as part of the record. The order of the Appellate Commissioner reveals that this was produced before that authority too, even though while rejecting the claim the document was not adverted to. To the Court, the certificate issued by the US authorities appears or be a valid proof of re-exportation of the goods against the said Carnet. It is important to note that none of the authorities which dealt with the matter disbelieved the authenticity of the Certificate of Disposition. The observation by the third Respondent, which was confirmed by the first Respondent that the Certificate did not pertain to ATA Carnet No. 89/05-64919 but to another Carnet is exfacie incorrect. There is no mention of any other Carnet on the Certificate of Disposition, and it is clear that the same pertains to Carnet under dispute. Moreover, we also notice that the goods the Letter of Evidence dated 24-06-2009 issued by USCIB to the petitioner clarifies that the goods had been re-exported. The findings of the respondents were thereof unjustified and unreasonable, as the Appellant Commissioner and the revisional authority failed to take into account relevant and material facts. Their orders are, consequently held to be unsustainable.

In view of the above discussion, this Court is of the opinion that the writ petition must succeed. The orders issued by the respondents are hereby quashed. The demands for payment, and any other demands connected with it, are hereby quashed. Writ Petition is allowed in the above terms.

Decision:- Writ Petition allowed.

Comment:- The essence of this case is that while deciding any case, the evidences produced and the submissions are required to be considered and the order passed without considering the same deserves to be set aside.

Comments

PJ/Case Laws/2012-13/1528

Post a Comment

Query