2015 (10) TMI 2035 - HC - Customs

Court grants interim relief: Importer can clear goods with 25% bank guarantee. Full duty if case lost. CBEC to decide.

The court granted conditional interim relief to the petitioner, allowing clearance of imported goods upon furnishing a bank guarantee for 25% of assessed ... Levy of Safeguard duty – Import of Patented Premium VAM Top Threaded and Coupled Connection – Whether petition under Article 226 of the Constitution of India is maintainable and petitioner is entitled to the grant of any interim relief or not? - Petitioner contends that goods imported fall within excluded category of notification issued by Central Government dated 13th August, 2014 – Department was of the view that the goods would not fall under excluded category and would attract safeguard duty. Held That:- Issue involved is a pure question of law and does not involve any question of fact – Jurisdiction of Respondent authorities is under challenge, it cannot be said that petition under Article 226 is not maintainable; petition thus maintainable – Notification excludes Non-API and Patented Premium Joints/Premium Connections/Premium Threaded Pipes and Tubes; there cannot be non-API pipes of API grade - Respondents are directed to allow clearance of subject goods as and when imported subject to bank guarantee to the extent of 25% of duty that may be assessed; failing on which, will have to deposit full duty. CBEC directed to decide the representations dated 16th December, 2014, 12th February, 2015 and 13th March, 2015 filed by the petitioner on or before 23rd October, 2015 and a copy of such decision shall be placed before this court on or before the returnable date. Issues Involved:1. Levy of safeguard duty on imported goods.2. Classification of imported goods under exclusion categories.3. Jurisdiction and authority of customs authorities.4. Availability and adequacy of statutory remedies.5. Grant of interim relief.Detailed Analysis:1. Levy of Safeguard Duty on Imported Goods:The primary issue revolves around the imposition of safeguard duty on goods imported by the petitioner. The Central Government, via a notification dated 13th August 2014, imposed safeguard duty on Seamless Pipes and Tubes under the Customs Tariff Act, excluding certain categories. The petitioner contends that their imported goods fall within the excluded categories, specifically category (ii) - Non-API and Patented Premium Joints/Premium Connections/Premium Threaded Tubes and Pipes. However, customs authorities disagreed, leading to the Order-In-Original which held the goods liable for safeguard duty. The petitioner's appeal against this order was dismissed, prompting further legal action.2. Classification of Imported Goods under Exclusion Categories:The petitioner argued that the imported goods are highly specialized and fall under the excluded categories specified in the notification. The Director General of Safeguards, after consulting the domestic industry, confirmed that the products in question were excluded from the scope of the investigation. Despite this, the customs authorities imposed the safeguard duty, leading to a dispute over the correct classification of the goods.3. Jurisdiction and Authority of Customs Authorities:The petitioner challenged the jurisdiction of the customs authorities to levy safeguard duty, arguing that the duty imposition was without authority and violated Article 265 of the Constitution of India. The customs authorities maintained that the petitioner had statutory remedies available and that the dispute involved factual determinations unsuitable for resolution under Article 226.4. Availability and Adequacy of Statutory Remedies:The respondents argued that the petitioner had an efficacious statutory remedy through reassessment and appeal under the Customs Act. The petitioner countered that these remedies were not efficacious given the urgency and the large public element of their project, and that the issue was a pure question of law regarding the interpretation of the notification, not a factual dispute.5. Grant of Interim Relief:The court considered whether to grant interim relief to the petitioner. The petitioner sought a declaration that their goods were excluded from safeguard duty and requested the CBEC to act on the clarification provided by the Directorate General of Safeguards. The court noted that the petitioner had made a prima facie case for interim relief, given the domestic industry's confirmation of the exclusion and the nature of the project. However, considering the petitioner's loss before the adjudicating authority and the Appellate Commissioner, the court decided to grant conditional interim relief.Conclusion:The court issued a rule returnable on 28th October 2015, allowing the petitioner to clear the imported goods subject to furnishing a bank guarantee for 25% of the assessed duty and an undertaking to pay the full duty with interest if they ultimately lost the case. The CBEC was directed to decide the petitioner's representations by 23rd October 2015 and report back to the court. The court also permitted direct service of the order.