Kitex Garments Limited v. Commissioner of Customs, Cochin (and others)

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **WEDNESDAY, THE 8TH DAY OF AUGUST 2018 / 17TH SRAVANA, 1940** **WP(C).No. 15738 of 2007** **PETITIONER(S):** **KITEX GARMENTS LIMITED, P.B.NO.5, KIZHAKKAMBALAM, ALUVA,, ERNAKULAM DISTRICT, KERALA-683 562, REPRESENTED BY ITS MANAGING DIRECTOR, SABU M.JACOB.** **BY ADV.SRI.P.R.VENKETESH** ## **RESPONDENT(S):** **1. THE COMMISSIONER OF CUSTOMS, CUSTOM HOUSE, COCHIN, W/ISLAND, KOCHI-682 009.** ## **2. THE DY.COMMISSIONER OF CUSTOMS** **(IMPORT), OFFICE OF THE COMMISSIONER OF CUSTOMS, CUSTOM HOUSE, COCHIN, W/ISLAND, KOCHI-682 009.** **3. SMT.S.SREEMATHI, ASST.COMMISSIONER, OFFICE OF DY.COMMISSIONER OF CENTRAL EXCISE,, WAGLE-2 DIVISION, B 91-2ND FLOOR,, NEW CENTRAL EXCISE BUILDING, WAGLE INDUSTRIAL ESTATE, THANE WEST-400 604.** **R1 BY ADV. SRI.P.PARAMESWARAN NAIR, CGC** **R1 BY ADV.SRI.N.NAGARESH, ASG** **R1 & R2 BY ADV. SRI.JOHN VARGHESE,SC,CEN.BOARD OF EXCISE R BY ADV. SRI.ABRAHAM THOMAS, CGC** **R1,2 BY SREELAL N. WARRIER, SC, CENTRAL BOARD OF EXCISE & CUSTOMS** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08-08-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No. 15738 of 2007** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** |**EXT.P1:**|**TRUE COPY OF ORDER DTD.19.2.04 OF R2 REJECTING THE**| |---|---| ||**PETITIONER'S CLAIM OF EXEMPTION**| |**EXT.P2:**|**TRUE COPY OF COMMISSIONER'S (APPEALS) ORDER DTD.4.6.04**| ||**CONFIRMING EXT.P1**| |**EXT.P3:**|**TRUE COPY OF ORDER OF CESTAT DTD.27.7.06 UPHOLDING**| ||**PETITIONER'S CLAIM**| |**EXT.P4:**|**TRUE COPY OF SPEAKING ORDER DTD.24.11.05 OF R2 COVERING 3 NOS.**| ||**BILLS OF ENTRY**| |**EXT.P5:**|**TRUE COPY OF SPEAKING ORDER DTD.7.12.05 OF R2 COVERING 9 NOS.**| ||**BILLS OF ENTRY**| |**EXT.P6:**|**TRUE COPY OF COMMISSIONER'S (APPEALS) ORDER DTD.31.10.06**| ||**ALLOWING PETITIONER'S APPEALS IN RESPECT OF 12 NOS.BILLS OF**| ||**ENTRY**| |**EXT.P7(A):**|**TRUE COPY OF LETTER DTD.26.11.05 OF PROTEST**| |**EXT.P7(B):**|**TRUE COPY OF LETTER DTD.10.01.06 OF PROTEST**| |**EXT.P7(C):**|**TRUE COPY OF LETTER DTD.27.01.06 OF PROTEST**| |**EXT.P7(D):**|**TRUE COPY OF LETTER DTD.8.3.06 OF PROTEST**| |**EXT.P7(E):**|**TRUE COPY OF LETTER DTD.15.3.06 OF PROTEST**| |**EXT.P7(F):**|**TRUE COPY OF LETTER DTD.28.3.06 OF PROTEST**| |**EXT.P7(G):**|**TRUE COPY OF LETTER DTD.19.4.06 OF PROTEST**| |**EXT.P7(H):**|**TRUE COPY OF LETTER DTD.18.5.06 OF PROTEST**| |**EXT.P7(I):**|**TRUE COPY OF LETTER DTD.29.5.06 OF PROTEST**| |**EXT.P7(J):**|**TRUE COPY OF LETTER DTD.22.6.06 OF PROTEST**| |**EXT.P8:**|**TRUE COPY OF LETTER DTD.22.8.06 TO R2 REQUESTING TO ISSUE**| ||**SPEAKING ORDER**| |**EXT.P9:**|**TRUE COPY OF LETTER DTD.22.9.06 TO R2 REQUESTING TO ISSUE**| ||**SPEAKING ORDER**| |**EXT.P10:**|**TRUE COPY OF LETTER DTD.1.12.06 TO R2 REQUESTING TO ISSUE**| ||**SPEAKING ORDER**| |**EXT.P11:**|**TRUE COPY OF FAX DTD.26.2.07 CONTAINING CONTENTS OF EXT.P10**| ||**LETTER**| |**EXT.P12:**|**TRUE COPY OF LETTER DTD.12.4.07 FROM R2 CALLING FOR PRODUCTION**| ||**OF ACKNOWLEDGEMENTS OF PROTEST DTD.12.4.07**| |**EXT.P13:**|**TRUE COPY OF REPLY DTD.19.4.07 FROM THE ASST.COMMISSIONER**| |---|---| ||**(REFUND)**| |**EXT.P14:**|**TRUE COPY OF TABULAR STATEMENT**| |**EXT.P15:**|**TRUE COPY OF REFUND APPLICATION DTD.21.3.07 IN RESPECT OF**| ||**BILLS OF ENTRY**| |**EXT.P16:**|**TRUE COPY OF CIRCULAR NO.24/04 DTD.18.3.04**| |**RESPONDENTS' EXHIBITS: NIL**|| ## **OKB** **TRUE COPY P.A. TO JUDGE** ## **DEVAN RAMACHANDRAN, J** ## --------------------------------- ## **W.P.(C) No.15738 of 2007** ---------------------------------- _Dated this the 8[th] day of August, 2018_ ## **JUDGMENT** The petitioner claims to be an importer of plastic bags under the name 'GERBER' from Hongkong China, which is stated to be imported for the purpose of packing babies garments. According to them, the imported plastic bags, which are embossed with the name 'GERBER', are exempted from duty under Section 25(1) of the Customs Act through a Notification No.21/02/Cus, dated 01.03.2002, (hereinafter referred to as the Notification), wherein serial No.140 includes the articles imported by them. 2. The controversy in this case arose because when the petitioner imported the articles, according to them, the Customs Appraiser did not permit them the benefit of the Notification and, therefore, that they paid the applicable duty under protest, since they were in a hurry on account of certain commitments to have the articles imported. 3. The petitioner asserts that they preferred Exts.P7(a) to P7(j) letters to the Appraiser of the Customs, but concedes that _W.P(C).15738/07_ **:2:** they have not been able to obtain any acknowledgment of the same from the said officer. As per the petitioner, Exts.P7(a) to P7(j) would clearly show that they have paid duty under protest and that a request had been made by them therein to issue an order under Section 27 of the Customs Act so as to enable them to file an appeal before the Commissioner of Customs (Appeals). 4. The proximate cause for the petitioner to approach this Court by filing this writ petition is Ext.P13 order, issued by the Assistant Commissioner (Refunds), Customs, whereby the request made by the petitioners for an order of refund under Section 27 of the Act has been rejected on the ground that the petitioner had paid the duty without demur and, therefore, that in the absence of any dispute being raised by them, when the goods were cleared, no order under Section 27 can be issued. The petitioners challenge Ext.P13 as being illegal, unlawful and unconstitutional and they say that they have a statutory right under the Customs Act for being favoured with an order under Section 27, so as to enable them to file a statutory appeal against denial of the benefits of the Notification. 5. I have heard Sri.Keerthivas, the learned counsel for the petitioner and Sri.Amal Darsan, the learned counsel representing _W.P(C).15738/07_ **:3:** the Standing Counsel for the Customs and Central Excise appearing for respondents 1 to 3. 6. On a consideration of the submissions made before me by the learned counsel for the parties, I am drawn to a firm impression that the disputations between the parties in this case is more in the arena of factual circumstances than relating to forensic evaluations. I say this because it is now settled law by the Hon'ble Supreme Court in **Escorts Limited v. Union of India [1998 (97) E.L.T.211 (S.C.)]** that in the absence of an objection being raised by the importer regarding the classification and the duty, at the time when the import is effected, normally the Authorities under the Customs Act would not be enjoined to issue any order under Section 27 of the Customs Act because there is no dispute raised and, therefore, there arises no reason for such an order. Similar position has been reiterated by the Hon'ble Supreme Court in **Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive)** **[2004 (172) E.L.T. 145 (S.C.)** also. Therefore, if the petitioner had preferred Exts.P7(a) to P7(j), as is contended by them, it would then ineluctably show that they had raised a dispute regarding the duty payable vis-a-vis the claim of _W.P(C).15738/07_ **:4:** exemption made by them. 7. However, the learned counsel appearing for the Customs and Central Excise vehemently asserts that, as has been recorded in Ext.P13, they had received an objection regarding the duty only in the case of two bills of lading and that Exts.P7(a) to P7(j) letters were never received by them. According to the learned counsel, since Exts.P7(a) to P7(j) had not been preferred by the petitioner, but has been produced in this court only by way of an afterthought, it would not obtain to them the locus to demand that an order under Section 27 be issued by the Authority nonetheless. 8. It is in the afore circumstances that I say that the evaluations in this case fundamentally are in the factual arena than on legal issues, because the question whether Exts.P7(a) to P7(j) had been filed by the petitioner and whether the Authorities issued Ext.P13 in spite of this, are issues that are squarely within the ambit of disputations of facts. Going by the well recognised constraints of jurisdiction of this Court, while acting under Article 226 of the Constitution of India, in delving into or affirmatively stating on factual circumstances, I am certainly of the view that this is an issue that will require to be _W.P(C).15738/07_ **:5:** decided by the competent Authority at the first instance. 9. I am persuaded to this course for the added reason that in Ext.P13 there is no whisper regarding the non-receipt of Exts.P7(a) to P7(j); but the Authority merely says that they have received only complaints as regards two bills of lading and not the rest. The learned counsel for the petitioner Sri.Keerthivas adds to this by submitting that even though the petitioner had averred in paragraph 11.7 of the writ petition that Exts.P7(a) to P7(j) were handed over to the Appraiser, but not acknowledged by her, there is no denial of this in the counter pleadings filed by the respondents. When I heard Sri.Keerthivas as above, I scanned through the counter affidavit to verify whether the counter pleadings of the respondents had made such a denial and I see that they have only stated in paragraphs 4 and 5 thereof that the petitioners have lodged protest only with respect to two bills of lading and not the others. However, in answer to the submissions of Sri.Keerthivas, Sri.Amal Darsan submits that even if it is assumed that Exts.P7(a) to P7(j) were preferred by the petitioner, there are very serious discrepancies with respect to the dates of the said letters and the date of the bill of entry shown therein, the former being _W.P(C).15738/07_ **:6:** ante-dated to the date shown in the latter. Even though I take note of these submissions, I do not think that I should consider this affirmatively at this time, particularly because Sri.Keerthivas says that his client will be able to explain before the Authority how the dates are shown in Exts.P7(a) to P7(j) and that they are not really discrepancies. 10. When I hear the above submissions, it becomes fortified that these are essentially questions of fact, which I cannot consider for the reasons that I have already recorded above. I am, therefore, of the view that it is now essential that a comprehensive view is obtained on all these issues at the hands of the competent Authority, so that the factual disputations can find resolution at the first instance. 11. In such circumstances, I order this writ petition and direct the 2[nd] respondent, the Deputy Commissioner of Customs (Import), to reconsider the petitioner's claim for refund under Section 27 of the Customs Act, taking into account all relevant materials that may be placed before him by the petitioner. The contention of the petitioner that he had preferred Exts.P7(a) to P7(j) before the concerned Appraiser will be an issue that will be available to the petitioner to establish by cogent materials, _W.P(C).15738/07_ **:7:** including by relying upon the documents in this writ petition which, they assert, indicates such receipt by the said officer. The said contentions of the respondents regarding the dates shown in those letters viz-a viz the date of the respective bills of lading will also engage the attention of the Authority. 12. After consideration of all relevant and germane factors and inputs, the 2[nd] respondent will pass an appropriate order in terms of law, either under Section 27 of the Act or rejecting the request of the petitioner for such an order, by recording the reasons that has led to his decision. 13. To facilitate reconsideration as ordered herein, I deem it appropriate to quash Ext.P13 order not because I have considered its merits conclusively, but only to pave way for reconsideration by the competent Authority afresh and without being fettered by the decision taken therein. This writ petition is thus ordered. ## **Sd/-** **DEVAN RAMACHANDRAN, Judge** okb. //True copy// P.A. to Judge