2016 (10) TMI 642 - HC - Customs

State Excise & Customs Powers: Coordination Directive for Timely Import Clearance

Atul Chamanlal Mehta Versus Union of India

The Court acknowledged the State Excise's powers under the Maharashtra Prohibition Act, 1949, and customs' authority in goods clearance. The judgment ... Clearance of Chemical-Ethanol without any condition including insisting on any state excise license - issuance of writ of mandamus - goods brought in this country so as to meet a contractual obligation - Held that: - in matters of import of consignments/goods attracting the customs duty and liability to pay the same, the release of such goods for home consumption are all matters within the preview of the customs and once they take the precautionary measures and satisfy themselves about the compliances under the Customs Act and Rules framed thereunder, then, the consignments deserve to be released. Merely because they are released on passing on an assessment order does not mean that the powers under the Maharashtra Prohibition Act, 1949 cannot be exercised by the State Excise - Petitions disposed of with a direction that the Respondent shall pass the requisite orders within a period of one week. Issues:1. Petition for writ of mandamus to clear laboratory chemicals without state excise license.2. Customs clearance of goods without license but insistence by State Excise.3. Dispute over powers of State Excise under Maharashtra Prohibition Act, 1949.4. Jurisdiction of customs authorities versus State Excise in goods clearance.Analysis:Issue 1: The petitioners sought writs to clear laboratory chemicals without state excise license, citing contractual obligations evidenced by Bill of Entries. Despite willingness to undergo assessment for early release, the Respondents failed to issue necessary orders, resulting in consignment delay at the Port.Issue 2: The Deputy Commissioner of Customs confirmed allowing clearance without state excise license based on bank guarantees or bonds. However, importers failed to comply with directions to provide evidence of sale to reputable laboratories or proof of State Excise duty, leading to State Excise intervention citing the Maharashtra Prohibition Act, 1949.Issue 3: The State Excise, invoking the Maharashtra Prohibition Act, 1949, emphasized the need for regulation to prevent tragedies like hooch incidents due to misuse of spirits. Despite the Petitioners' objections, the State Excise insisted on intervention, citing powers granted by the Act and Supreme Court judgments.Issue 4: The Court acknowledged the State Excise's powers under the Maharashtra Prohibition Act, 1949, to regulate intoxicants but emphasized customs' authority in assessing and releasing goods subject to customs duties. The judgment clarified that customs' clearance did not preclude State Excise's enforcement of the Act, leading to the disposal of both petitions with a directive for the Respondent to issue orders within a week.The judgment delineated the distinct roles of customs and State Excise, ensuring compliance with both customs regulations and State laws governing intoxicants. It highlighted the need for coordination between agencies to prevent misuse while upholding the rights of importers to timely clearance of goods.