2016 (4) TMI 722 - HC - Customs

High Court clarifies Customs Act duty exemption conditions, deems demand for packaging list improper, sets aside show cause notices observations.

The High Court clarified the interpretation of conditions for duty exemption under Section 25 of the Customs Act, 1962. It affirmed the petitioner's ... Seeking quash of letter dated June 18, 2013 and declaration that the condition Nos.34(b) and 34(c) of the notification No.12 of 2012, was satisfied by the petitioner while importing - Import of gold dore bar - goods are to be imported in accordance with the packaging list issued by the mining company by whom they are produced. Held that:- the goods are not required to be imported along with the packaging list. In the Condition No. 34 the expression 'in accordance with the packing list issued by the mining company by whom they were produced' is used. Normally, the courts will have to follow the rule of literal construction, which enjoins the court to take words as used and to give it the meaning, which naturally implies. As there is no allegation that the importer did not follow the procedures set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996, therefore, we do not find any fault in the order of the Hon'ble Single Judge in holding that the demand of the Deputy Commissioner for production of the packaging list from the mining company was illegal and that the importer has complied with the requirements of the notification No.12 of 2012. - Appeal disposed of Issues:1. Interpretation of conditions for exemption from duty under Section 25 of the Customs Act, 1962.2. Compliance with conditions for import of gold dore bars under notification No.12 of 2012.3. Demand for packaging list from the mining company by customs authorities.4. Show cause notices issued by Directorate of Revenue Intelligence challenging benefit of notification No.12 of 2012.Analysis:1. The judgment involved the interpretation of conditions for exemption from duty under Section 25 of the Customs Act, 1962. The Central Government issued a notification granting exemption from duty for specified goods, including gold dore bars, subject to compliance with specified conditions.2. The compliance with conditions for the import of gold dore bars under notification No.12 of 2012 was scrutinized. The petitioner, a public limited company, imported gold dore bars from Perth Mint, Australia, fulfilling conditions like shipping directly from the producing country and providing assay certificates.3. The dispute arose when customs authorities demanded the packaging list from the mining company, which the petitioner argued was impossible due to legal restrictions. The court held that the demand for the packaging list was improper as the goods were not required to be imported along with it, based on a literal interpretation of the relevant condition.4. Show cause notices were issued challenging the benefit of the notification, but these were not challenged in the writ petition. The court set aside any observations related to these notices, stating that the law would take its course independently. The judgment modified the order of the Single Judge accordingly, allowing the appeal in part and disposing of related matters.Conclusion:The High Court clarified the interpretation of conditions for duty exemption, affirmed the compliance of the petitioner with import conditions, deemed the demand for the packaging list as improper, and set aside observations on unchallenged show cause notices. The judgment modified the Single Judge's order accordingly, allowing the appeal in part and disposing of related matters without costs.