TaxTMI 
TaxTMI 
TaxTMI 
2010 (7) TMI 456
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....tiorarified mandamus to quash the order passed by the second respondent invoking the Bank Guarantee given by the petitioner as against the advance licenses issued to the petitioner. 4. The facts in writ petition No. 1647/2003 would suffice for disposal of all the three writ petitions. The petitioner is an exporter and was granted three advance licenses for import of 2,14,268.350 kgs of stainless steel without payment of duty with a corresponding obligation to manufacture and export of 1,61,004.700 kgs of stainless steel utensils. According to the petitioner, they have completed 90% of the export obligation and also applied for extension for time to complete the export obligation before the first respondent. According to the petitioner....
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....be invoked. Therefore, the second respondent would contend that the Bank Guarantee is being invoked in terms of the bond executed, which is a statutory bond, pursuant to customs Notification No. 30/1997. It is further submitted that in the case of the petitioner, the Directorate of Revenue Intelligence, on receipt of specific intelligence that the stainless steel imported under the advance licenses were being misused and the duty free, imported raw material was diverted. Further, it is the case of the second respondent that when the DRI visited the petitioner's office premises, there is no such office functioning in the said premises for the past four years. Based on the out come of the investigation conducted by the DRI, due intimation hav....
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....y with a corresponding obligation to export manufactured stainless steel utensils. It is the case of the petitioner that they have completed 90% of the export obligation, but however, from the order in original passed by the commissioner of customs (Exports) dated 29-5-2004, it is seen that on the basis of the information furnished by the DRI, the first respondent has also issued show cause notice for cancellation of the advance licenses. However, the second respondent being an authority, functioning under the provisions of the Customs Act is bound by the notification and is entitled to enforce the statutory bond executed by the petitioner for while availing the benefit of customs Notification No. 30/97. As long as the export obligation, di....
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....ent of the Hon'ble Supreme Court in the case of East India Commercial Company case, Sampat Raj Dugar and Titan Medical Systems (as referred above) and stated that the Customs Authorities had no jurisdiction to issue to notice under section 108 of the Customs Act. The Division Bench of this court after considering the law laid down by the Hon'ble Supreme court in the case of Sheshank Sea Foods case held as follows. 23. Though there will be no question of the binding principle as laid down by the Supreme Court being watered down, in our opinion, the observations have been made in an entirely different context. There was no question regarding the power of the Customs authorities to initiate investigation or the enquiry, as the case may b....
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....ms duty. Therefore, in our opinion, the discharge of the export obligation per se cannot put an end to the whole story. 30. Insofar, as the second notification, Notification No. 30/97, is concerned, a similar provision regarding the export obligation also appears there. However, there appears to be a specific clause added., i.e. clause (vii), which is to the following effect : "(vii) exempt materials shall not be disposed of or utilized in any manner except for utilization in discharge of export obligation nor for replenishment of such materials and the materials so replenished shall not be sold or transferred to any other person". Learned Senior Counsel appearing on behalf of the Department very heavily relies on this clause and says....
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....e declaration and obtained a license, the importer cannot be permitted to now say that the imported material is freely importable under OGL and therefore should be allowed to be clear on merit rate. The Tribunal fell in error in permitting the clearance of the goods on merit rate. By doing so the Tribunal has virtually set at naught the purpose behind issuance of an exemption notification. If the Respondent is not an actual user he would not be entitled to utilize the license. The license having been secured by adopting fraudulent method would not confer any right on the importer and as such he cannot be allowed to plead any equity. Therefore we find that the order passed by the Tribunal is not sustainable and liable to be set aside. 8.&em....