2019 (6) TMI 647 - HC - Customs

Court quashes unjustified customs duty, rules in favor of petitioner based on exemptions.

The Court quashed the Order-in-Original levying Additional Duty of Customs, finding it unjustified. Despite the availability of an appeal remedy, the ... Levy of Additional Duty of Customs - exemption from duty subject to manufacturing without the aid of power - finalisation of provisional assessment - Circular No.26/2004-Cus, 31.03.2004 - HELD THAT:- It is seen in the present case that the petitioner had produced a certificate dated 11.02.2003, issued by the Forest Department of the Sri Lankan Government, evidencing that the product was extracted manually and there was no aid of power. This certificate has not been considered by the second respondent in the impugned order by either disbelieving the same or questioning its validity. Since the CEGAT had earlier held that a simple declaration evidencing that the product was manufactured without the aid of power would suffice for the purpose of grants exemption from payment of customs duty, there is no justification on the part of the second respondent herein to hold otherwise in the present impugned order. As such, the respondents are not justified in rejecting the declaration given or the certificate issued by the Government Agency of the Supplying Country, which would be sufficient for the purpose of the exemption, in view of the circular dated 31.03.2004. Petition allowed. Issues involved:Challenge to impugned Order-in-Original levying Additional Duty of Customs @16% under Customs Tariff Heading 1301.90 - Consideration of certificates for exemption - Availability of alternate remedy under Section 128 of Customs Act.Analysis:1. The Writ Petition challenges the Order-in-Original No.546/03 dated 06.05.2003, which levied an Additional Duty of Customs @16% under Customs Tariff Heading 1301.90. The petitioner had replied to a show cause notice but was unsatisfied with the final assessment made by the second respondent.2. The petitioner argued that a previous case before the Commissioner of Customs (Appeal) and CEGAT had established that the product, Oleo Pine Resin, was exempt from Customs Duty if produced without the use of power. A circular dated 31.03.2004 further supported this by accepting declarations from the Chamber of Commerce or Government agencies as proof of manual extraction.3. The impugned Order-in-Original relied on a CEGAT verdict irrelevant to the present case, as argued by the petitioner's counsel. The Standing Counsel for the respondents contended that an appeal remedy under Section 128 of the Customs Act was available, making the Writ Petition liable for dismissal for not pursuing the alternate remedy.4. The Court considered the submissions and noted that the circular No.26/2004-Cus allowed for exemption based on supplier certificates, as established in previous judgments. The petitioner had provided a certificate from the Sri Lankan Forest Department confirming manual extraction without power, which was not considered in the impugned order.5. Rejecting the argument for dismissal based on an alternate remedy, the Court found no justification in the impugned Order-in-Original. Given the established precedents and circular provisions, the Court quashed the Order-in-Original No.546/03 dated 06.05.2003, allowing the Writ Petition without costs. The appeal remedy was deemed futile in light of the circular's provisions, supporting the exemption based on manual extraction certificates.