2021 (7) TMI 1051 - HC - Customs

Court dismisses appeal challenging customs duty rates for gold purchase due to failure to deposit margin money.

The appeal challenging a communication regarding customs duty rates for gold purchase was dismissed by the court. The appellant failed to deposit margin ... Scope of the contract - Change in the price of Gold Bars due to change in rates of Customs duty - revision in the price of Gold bars imported, which was still in stock and is not sold till date - appellant submitted that the Corporation could not have insisted for revised payment of customs duty at the enhanced rate as the same has already paid along with the customs duty - whether the Corporation like any other importer of gold has a right to sell the gold after a particular date at the rate fixed by it? - HELD THAT:- Admittedly, the appellant had not made any payment to the respondent- Corporation and the appellant has not sustained any loss from the transaction in question. The issue decided in the case of BANGALORE BULLION TRADERS, BANGALORE VS. MINERALS AND METAL TRADING CORPORATION LIMITED, BANGALORE [2003 (2) TMI 546 - KARNATAKA HIGH COURT] where it was held that incurring loss or making profit in a trade like this is very much inherent in the trade itself and therefore, simply because the petitioners are required to pay the price of the gold at the higher rate, consequent upon the increase in the customs duty and consequential increase in the sales tax etc., it is not the right of the petitioners to insist that the Corporation should sell the gold to them at the rate at which the Corporation imported gold. Appeal dismissed - decided against appellant. Issues:Validity of the order passed by the learned Single Judge dismissing the writ petition preferred by the appellant.Analysis:The appellant, a partnership firm engaged in trading gold, approached a Government of India enterprise, respondent No.2, to purchase 100 kgs of gold with 999 purity. The appellant failed to deposit the required margin money, leading to a communication on 22.01.2013 about the hike in customs duty for un-committed stock. Despite the appellant's request to charge customs duty at old rates, the Corporation insisted on the current rate, leading to a writ petition challenging the communication dated 24.01.2013. The learned Single Judge, relying on a division bench decision, dismissed the writ petition.The main contention raised by the appellant was that the Corporation could not insist on revised payment of customs duty at an enhanced rate as it had already paid the duty. The Corporation argued that there was no concluded contract between the parties, and the issue was covered by a division bench decision. The court noted that the appellant had not made any payment to the Corporation and had not suffered any loss from the transaction. The key issue was whether the Corporation, as an importer of gold, had the right to sell gold at a rate fixed by it after a specific date.The court referred to the division bench decision in 'BANGALORE BULLION TRADERS, BANGALORE VS. MINERALS AND METAL TRADING CORPORATION LIMITED, BANGALORE', which established that the Corporation, like any other importer, had the right to fix prices based on market conditions. The court emphasized that trading organizations bear the risk of profit or loss in transactions, and buyers cannot insist on purchasing at previous rates if market conditions change. The court concluded that the controversy in the appeal was covered by the division bench decision, and the learned Single Judge rightly relied on it.In conclusion, the court found no merit in the appeal and dismissed it based on the established legal principles outlined in the division bench decision.