TaxTMI 
TaxTMI 
2017 (3) TMI 218
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....s and pendants" at the petitioner's firm situate inside the Madras Export Processing Zone (MEPZ), Special Economic Zone, Tambaram, Chennai. On the basis of such letter of approval, the petitioner firm set up a manufacturing facility for gold jewellery and articles and commenced export of gold medallions. According to the petitioner, gold medallions are nothing but pendants. In other words, the petitioner firm manufactured 'gold medallions' which are technically called as pendants. Both the medallions and pendants are one and the same and they were used to hang on the neck. The respondent also permitted the petitioner to continue to export the gold articles inasmuch as all the pendants are not medallions but all medallions are pendants. Further, before export of the goods, they were physically examined by the customs authorities with respect to description, quantity, weight etc., and they have not raised any objection. In fact, the petitioner firm had successfully exported the gold jewel during the financial year 2008-2009, 2009-2010, 2010-2011 and 2011-2012 and during this period, there was no complaint or objection raised by the respondent with respect to violation of ....
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....ording an opportunity of hearing to the petitioner to submit a reply to the corrigendum dated 14.08.2014. Pursuant to such direction, the respondent called upon the petitioner to appear for an enquiry on 24.03.2015. On that date, the petitioner appeared before the respondent and submitted a written submission contending that the respondent is not justified in imposing the penalty without following the Rules prescribed. During the personal hearing, it was specifically contended that the functional utility of medallion and pendant are one and the same and therefore the predominant and primary usage of the utility has to be taken into account apart from understanding the definitions given to those articles in the common parlance. Further, on that date, the petitioner also submitted affidavits obtained from goldsmith, jewellery dealer and Madras Jewellers & Diamond Merchants Association submitted on 26.03.2015 to prove that both pendant and medallion are one and the same. Notwithstanding such submissions, the respondent has passed the order dated 20.04.2015 imposing penalty on the petitioner firm, which is impugned in this writ petition. 4. The learned counsel for the petitioner wou....
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.... distinction or dissimilarities between 'Medallion' and 'Pendant' and both are same. In fact, there is no demarcation or classification made under the SEZ Rules or the Act with respect to the differentiation of 'Medallions' and 'Pendant'. The respondent has failed and neglected to consider the functional utility of the 'medallions' and by misreading the dictionary meaning, it was concluded that 'medallions' and 'pendant' are different. The learned counsel for the petitioner demonstrated that a pendant is round in shape called a 'medallion' and a 'pendant' which has a hook is called a 'locker'. To substantiate the above, the petitioner also produced the affidavits obtained from the goldsmith, jewellery dealer and the Jewellers and Diamond Merchants Association which were submitted before the respondent during the course of personal hearing. By placing reliance on the above, it was contended that both 'medallion' and 'pendant' are one and the same. Further, it is contended that at the time of submitting the application for setting up the unit in SEZ, it was clearly stated that the product ....
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....rlier failed to notice the flaw. Therefore, it was concluded by the respondent that by an administrative act, such a mistake committed earlier can be cured when it is brought to the notice of the respondent. Thus, according to the learned counsel for the petitinoer, there was no misdescription or misinformation furnished by the petitioner at the time of exporting the 'medallion' and it was also permitted by the authorities during the relevant point of time. While so, after closure of the manufacturing unit and when the petitioner had stopped the exporting of the gold jewellery, the order of penalty came to be passed. According to the counsel for the petitioner, after closure of the manufacturing unit of the petitioner, it is not open to the respondent to pass the impugned order and it was passed without jurisdiction. 8. The learned counsel for the petitioner would further contend that in the impugned order, it was claimed by the respondent that though the customs tariff does not differentiate between 'pendant' and 'medallion', in Para Nos. 4.A2 of the Handbook of Procedures of Foreign Policy it was prescribed that wastage permitted for pendant is at 3.5% ....
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....nct value addition and wastage norms. These products are not defined anywhere in the statute and they are different items in terms of the value addition and wastage norms. Therefore, the respondent has rightly concluded that the petitioner unit has violated the provisions of the Letter of Approval issued to them where it was specifically stated that that the petitioner unit is permitted to export 'gold jewellery and articles' and it will not include 'pendant'. When this was brought to the notice of the respondent, after affording sufficient opportunity of hearing to the petitioner, the order was passed imposing penalty on them. According to the learned Assistant Solicitor General, the Act and Rules do not differentiate these two items namely 'medallion' and 'pendant' however, the handbook of procedure and foreign trade policy clearly describe that wastage permitted for 'pendant' is at 3.5% while for medallion, the permissible wastage is 0.25% and therefore it was rightly concluded by the respondent that 'medallion' are not 'pendant' as per the Foreign Trade Policy. When a specific finding was rendered as regards the violation ....
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....ntal chips, fobs, pendants (i.e., pins and clips, culf-links, dress-studs, buttons etc., religious or other crosses, medals and insignia, hat, ornament (pins, buckles, rings etc.,) ornaments for handbags, buckles and slides for belts, shoes etc., hair-slides, tiaras, dress combs and similar hair ornaments comes within the purview of articles of jewellery and parts thereof. It is clearly stated in 71.13 (b) that articles of personal use normally carried in the pocket, in the hand bag or on the person such as cigar or cigarette cases, snuff boxes, spectacle cases, power boxes, lipstick holders, pocket combs, cachou boxes, chain purses, rosaries, key rings. By placing reliance on the above categories contained in the Customs tariff, it is contended that medallions are large medals. A pendant on the other hand, is an object that is allowed to hang freely from something else. Hanging light fixtures too, for example are called 'pendants'. Thus, medallions can be made into a pendant and worn, but that would not be the case with all medallions and vice-versa. As per the customs tariff, medals and medallions (other than for personal adornment) are classified under Heading 71.14 whic....
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.... of 45 days. Inspite of such an appeal remedy provided as against the order passed by the respondent, for the reasons best known, the petitioner has invoked the jurisdiction of this Court under Article 226 of The Constitution of India. Therefore, the learned Assistant Solicitor General would vehemently contend that the writ petition is not maintainable and the petitioner has to prefer an appeal as provided in the impugned order. It is further stated in the additional counter affidavit of the respondent that as far as approval by the Unit Approval Committee is concerned, the committee, in the meeting held on 11.04.2014 has authorised the Development Commissioner of MEPZ-SEZ to adjudicate the unit under the provisions of Act and accordingly the respondent has passed the order of adjudication imposing the penalty. 16. I heard the learned counsel on both sides and perused the materials placed for consideration. The petitioner was given Letter of Approval (LoA) on 10.02.2008 for manufacture of 'gold bangles and pendants' within MEPZ-SEZ, Chennai. On the basis of such approval, the petitioner firm continued to manufacture 'gold medallions' and exported the same. Subseq....
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....17. In the light of the above factual background, the main point arise for consideration before this Court is whether the petitioner has violated the terms and conditions of the LoA and whether the commodity 'medallion' and 'pendant' are one and the same. In this context, the Dictionary meaning of the word 'Pendant' and 'Medallion' can be considered. While pendant is termed as a piece of jewellery that hangs from a necklace chain, medallion is also termed as a piece of jewellery in the shape of a medal worn as pendant. Therefore, it is clear that there is no distinction or difference between the meaning given to the commodities 'pendant' and 'medallion'. 18. The learned counsel appearing for the petitioner placed strong reliance on the order dated 19.02.2016 passed by the Income Tax Appellate Tribunal, Chennai Bench "C" in the appeal filed by the petitioner company itself in Income Tax Appeal Nos. 2311 and 2312 (MDS) of 2015. In the said order, the Appellate Tribunal while considering the claim of the petitioner firm relating to deduction under Section 10AA of the Income Tax Act, has given a categorical finding that the words '....
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....used as ornament jewellery along with chain and necklace. At the best, one may say that pendant and medallion are nothing but a designer jewellery to be worn along with chain or necklace. By taking into consideration of the utility of the medallions, this Tribunal is of the considered opinion that medallion is also a pendant. Therefore, merely because the product manufactured by the assessee was described as medallion, it cannot be said that there was any violation of approval granted by the Development Commissioner, Special Economic Zone. Irrespective of nomenclature used by the assessee or the Special Economic Zone, this Tribunal is of the considered opinion that what was manufactured by the assessee is pendant. Therefore, there is no violation of conditions imposed by the Development Commissioner." 19. It is evident from the order passed by the Appellate Tribunal that the very same issue as to whether 'pendant' and 'medalliion' are one and the same came up for consideration before the Tribunal at the instance of the petitioner and the Tribunal gave a categorical finding that both the commodity are one and the same with respect to their usage in common parlance....
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....ld only contend that it was a mistake committed by the authorities in according approval for export of the items in contravention of the terms and conditions of LoA and such violation cannot be allowed to be continued. However, there is no records made available before this Court to suggest that the respondent has taken any action against the person who was instrumental or negligent in discharge of the duty and who permitted the export of the products by the petitioner. This is more so that three years after the petitioner wound up the business owing to withdrawal of tax concessions by the Government, such an alleged violation on the part of the petitioner came to be noticed by the respondent. In such circumstances also, it can safely be concluded that the very basis on which the impugned order came to be passed by the respondent has no force and consequently it has to be set aside. 22. The respondent would contend that 'pendant' and 'medallion' have two distinct value addition and wastage norms. Even though these products are not defined anywhere in the statute and they are different items in terms of the value addition and wastage norms, in the Handbook of Proc....
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....h this Court or on that ground, this Court need not refuse to entertain the writ petition. In the decision of the Honourable Supreme Court in the case of Mani Subrat Jain etc., vs. State of Haryana and others reported in AIR 1977 SC 276 it was held that when there is judicially enforceable right as well as legally protected right, then a person suffering from a legal grievance can seek for a Mandamus under Article 226 of The Constitution of India. Further, the Honourable Supreme Court in the case of (Baburam Prakash Chandra Maheswari vs. Antarim Zila Parishad) reported in AIR 1964 SC 556 held that existence of alternative remedy is always not a bar for filing a writ petition where it is alleged that the Court or Tribunal acted against the provisions of law and in violation of principles of natural justice. 24. The learned Assistant Solicitor General appearing for the respondent relied on the decision of this Court passed in WP Nos. 33741 and 33742 of 2016 dated 30.09.2016 in the case of (M/s. Visal Lubtech Corporation and another vs. The Additional Commissioner of Customs) to buttress his submission as regards maintainability of this writ petition. In the said decision, the peti....
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....d on inspection of the sample, and given that the opinion was based on objective material, there ought to have been something more for the FDDI to conclude that "We therefore conclude that provided articles Fall under the category of chappal covered under Sl.No.64.10".... 9. The respondents, in our opinion, acted upon prejudice and a preconceived notion that ladies sandals cannot be without a back strap. To hold so, there ought to have been some evidence of commercial purpose, the fact that the Council - a Central Government body, which routinely deals with these issues in the context of export, had, based on evidence and instructions of the Government furnished an opinion that the goods were sandals and not chappals was deemed insufficient. Apart from these, the court wonders whether any of the experts in this case was a women, the ultimate customers. In such cases, the commercial parlance test would predominate....." 27. It is evident from the order passed by the Division Bench of the Delhi High Court that when expert body has given an opinion that there is no distinction between chappals and sandals merely because there was no back strap, it cannot be said that the p....