1996 (11) TMI 95 - HC - Customs

Respondent must address demand notice within 3 months, maintain bond. Importance of statutory adjudication stressed.

MAGNETIX (INDIA) LTD. Versus SUPDT. OF C. EX. & CUS., BHUBANESWAR

The Court directed the petitioner to respond to the demand-cum-show cause notice and allowed the appropriate authority to decide on the liability for ... Writ jurisdiction - Existence of alternative remedy Issues:1. Whether the petitioner is liable to pay interest on duty-exempted goods stored in a customs warehouse.2. Whether the exemption under the Notification is automatic or subject to conditions.3. Applicability of the scheme providing for a minimum value addition to export products.4. Jurisdiction of the Court to interfere in the matter due to the petitioner's statutory right of appeal under the Customs Act.Detailed Analysis:1. The petitioner, a public limited company, imported raw materials for manufacturing its product. After obtaining a Customs Duty Exemption Entitlement Certificate, the petitioner sought to clear the goods from the warehouse without paying customs duty. However, the authorities contended that interest on the duty was still applicable, leading to the petitioner challenging this claim in court. The court noted that the matter should be determined by statutory authorities under the Customs Act to avoid prejudicing either party. The court directed the petitioner to respond to the demand-cum-show cause notice and allowed the appropriate authority to decide on the liability for interest within three months.2. The opposition argued that the goods were dutiable at the time of import and storage in the warehouse, justifying the claim for interest. They emphasized that the exemption under the Notification was subject to conditions, particularly highlighting the requirement of importing goods under a valid license for duty exemption. The court acknowledged the need for statutory authorities to adjudicate the matter, considering the conditions of the Notification and the petitioner's fulfillment of requirements for exemption.3. The scheme's applicability was discussed concerning export products requiring a minimum value addition. The opposition contended that the scheme applied to products with a specified value addition percentage, and interference by the Court was unwarranted as the petitioner had a statutory right of appeal under the Customs Act. The Court refrained from making a determination on this issue, emphasizing that the statutory authorities should address the petitioner's contentions and provide a speaking order promptly.4. The Court, after hearing arguments from both sides, emphasized the importance of allowing the statutory authorities to adjudicate on the matter to prevent premature interference. It noted that the petitioner should respond to the show cause notice and that the appropriate authority would consider all raised points before making a decision. The Court disposed of the petition, directing the petitioner to maintain the bond submitted until the matter was resolved by the statutory authorities within three months.