2021 (10) TMI 139 - HC - Customs

Court upholds order allowing re-export of Gold Dore Bars, citing DGFT guidance.

Kundan Care Products Limited Through Its Director Versus Union Of India And Ors.

Kundan Care Products Limited Through Its Director Versus Union Of India And Ors. - TMI Issues Involved:1. Review of the High Court's order dated 4th September 2019.2. Grounds for seeking review under Order XLVII Rule 1 of the CPC.3. Interpretation of the terms 'for any other sufficient reason' in review petitions.4. Compliance with the conditions of the Import License and relevant Notifications.5. Eligibility for re-export of imported goods under the Foreign Trade Policy and Customs Act.6. Clarification from DGFT regarding the re-export of Gold Dore Bars.7. Legal precedents and their applicability to the case.Issue-wise Detailed Analysis:1. Review of the High Court's Order Dated 4th September 2019:The Union of India sought a review of the High Court's order dated 4th September 2019, which allowed the petitioner to re-export Gold Dore Bars based on a concession extended by the respondents' counsel. The order disposed of the writ petition and granted liberty to the petitioner to challenge any action regarding demurrage charges before the appropriate forum.2. Grounds for Seeking Review under Order XLVII Rule 1 of the CPC:The application for review was based on the grounds envisaged by Order XLVII Rule 1 of the CPC, which permits review on account of:(i) Discovery of new and important matter or evidence.(ii) Some mistake or error apparent on the face of the record.(iii) Any other sufficient reason analogous to those specified.3. Interpretation of 'For Any Other Sufficient Reason':The interpretation of 'for any other sufficient reason' was discussed with reference to the decision of the Privy Council in Chhajju Ram v. Neki and the Supreme Court's approval in Moran Mar Basselios Catholicos v. Most Rev. Mar Poulose Athanasius, Kamlesh Verma v. Mayawati, and Kantaru Rajeevaru v. Indian Young Lawyers Association.4. Compliance with Conditions of Import License and Relevant Notifications:The respondents contended that the petitioner imported Gold Dore Bars under an Import License issued by the DGFT, which permitted import only for refinery, subject to actual user condition. The import was also subject to Notification 50/2017-Cus, which required compliance with the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017, and the actual user condition for refining and manufacturing of standard gold bars.5. Eligibility for Re-export of Imported Goods:The petitioner argued that the Gold Dore Bars were still lying in the Customs port and that the actual user condition was a post-import condition. The petitioner relied on para 2.46 of the Foreign Trade Policy, 2015-2020, which allows re-export of imported goods under certain conditions. The DGFT clarified that gold is freely exportable, and there were no restrictions on its re-export.6. Clarification from DGFT:The petitioner sought a clarification from the DGFT regarding the re-export of Gold Dore Bars. The DGFT confirmed that gold is free for export, and there were no restrictions on its re-export, provided the goods are cleared under Customs Bond and the export is against freely convertible currency.7. Legal Precedents:The judgment referred to several legal precedents, including:- Garden Silk Mills Ltd v. U.O.I., which clarified the point at which goods are considered 'imported into India.'- M. J. Exports Ltd v. C.E.G.A.T., which discussed the permissibility of re-exporting imported goods.- Atul Commodities Pvt. Ltd. v. Commissioner of Customs, which established that the DGFT's interpretation of the FTP is final and binding.Analysis and Decision:The court found no ground to review its order dated 4th September 2019. It held that the import of the Gold Dore Bars was not complete as they were still within Customs bond, and the actual user condition did not apply at this stage. The DGFT's clarification supported the petitioner's case for re-export. The court dismissed the review petition, stating that the learned Standing Counsel's concession on 4th September 2019 was not erroneous.Conclusion:The review petition was dismissed, and the court upheld its original order allowing the petitioner to re-export the Gold Dore Bars. The court emphasized the importance of adhering to the DGFT's interpretation and the legal precedents supporting the petitioner's right to re-export.