TaxTMI 
TaxTMI 
2018 (3) TMI 1101
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....amra Port and the spares under the EPCG scheme. AND (iii) Issue an order, directing opposite party no.3 to extend the validity of EPCG Licenses, which remained unutilized due to inaction of Customs Authorities." 2. The essence of the contentions made by the petitioner- company through Mr. Asok Mohanty, learned Senior Counsel is that the petitioner-company sought to import three Grab Type Ship Unloaders (GTSU) from Shanghai Zhenhua Heavy Industries Co. Ltd., China for installation at its port located at the mouth of river Dhamra in the State of Odisha. It is averred that the intent behind import was to provide import facility for import of lime stone and thermal coal and various other cargo which require deep draught berths, equipped with mechanized handling and for such purpose, the essential sophisticated handling equipments like ship loaders, unloaders were required for the purpose. Accordingly, the petitioner sought for authorization under the Export Promotion Capital Goods (EPCG) Scheme and the Foreign Trade Policy (FTP) 2015-20. Necessary certification/ authorization for import of capital goods and spares were issued in terms of the Foreign Trade Policy....
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.... dated 01.04.2015 which is quoted herein below : "GOVERNMENT OF INDIA, MINISTY OF FINANCE (DEPARTMENT OF REVENUE) Notification No.16/2015-Customs New Delhi, the 1st April, 2015 G.S.R. 252(E)-In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in the Table 1 annexed hereto, from (i) xxx xxx xxx (ii) xxx xxx xxx 2. The exemption under the notification shall be subject to the following conditions, namely - xxx xxx xxx (10) that the imports and exports are undertaken through the seaports, airports or through the inland container depots or through the land customs stations as mentioned in the Table 2 annexed hereto or a Special Economic Zone notified under section 4 of the Special Economic Zones Act, 2005(28 of 2005); Provided that the Commissioner of Customs may, by special order or a public notice and subject to such conditions as may be specified by him, permit import and export through any other sea-port, ai....
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....pears that necessary application was moved before the Assistant Commissioner, Paradeep Customs seeking issue of TRA and the said permission was granted by the Assistant Commissioner, Customs Paradeep Port on 07.06.2016. 8. While the situation stood thus, it appears that the Commissioner of Customs, before whom petitioner had applied for exercise of power under the Proviso to Paragraph-10 of notification No.16/2015 of Central Board of Excise and Customs dated 01.04.2015, ultimately rejected such a prayer after a period of 1 year 3 months vide the impugned order vide letter dated 11.08.2017 under Annexure-1. The relevant portion thereof is quoted herein below: "GOVERNMENT OF INDIA COMMISSIONERATE OF CUSTOMS (PREVENTIVE), BHUBABNESWAR, CENTRAL REVENUE BUILDING, RAJASWA VIHAR, BHUBANESWAR-751007 Phone No.0674-2589082, Fax No. 0674-2589612, Email [email protected] C. No. VIII(48)53/CUS(P)/BBSR/2016 Dated 11.08.2017 To M/s. Dhamra Port Company Limited At-Dosinga, P.O. Dhamra District: Bhadrak Odisha-756171 Sub: Import of Capital Goods under EPCG Scheme in terms of Chapter-5 of the Foreign Trade Policy (2015- 20), impor....
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....otification No.16/2015-Cus dated 01.04.2015 should have been issued prior to the date of arrival of goods in India. In the instant case, I find that M/s. Dhamra Port Company Limited (DPCL) applied to Jt. DGFT, Cuttack on 30.04.2016 for EPCG Licence, but no intimation was given to Customs Department requesting for issue of Public Notice/Special Order in anticipation of getting the EPCG License. The vessel, MV ZHEN HUA 8, arrived in Dhamra on 5/5/2016, but the Customs Department was informed only on 9/5/2016, even though 5th & 6th May, 2016 were working days in Commissionerate Headquarters. I also find that the EPCG license (issued by DGFT on 13.05.2016) was registered in Paradeep Customs House on 06.06.2016, which is a notified port under Notification No.16/2015-Cus dated 01.04.2015. However, the action of Assistant Commissioner, Paradeep Customs House in issuing RA for entire consignment in favour of Dhamra Customs (a non-specified port for EPCG Scheme) on 07.06.2016 is entirely wrong, as the Commissioner had not accorded the Special Order declaring Dhamra to be eligible for EPCG Scheme till such time and the RA should be cancelled forthwith. 8. In terms of Para 2.13 of th....
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....has been allowed to unloading of imported goods and loading of export goods or any class of such goods vide Notification No.44/2017 Customs (NT) dated 11.04.2017, but before this Notification, the project imports were restricted to be imported in the petitioner's port vide Notification No.16/2012-Customs (N.T.) dated 29.02.2012. Therefore, the present importation of goods without prior permission by the Customs authority is irregular and illegal. Photocopy of Notification No.16/2012-Customs (N.T.) is annexed herewith and marked as Annexure-B/2 for kind perusal of this Hon'ble Court. The petitioner's company is aware of the facts that their port has not been notified by the Government for exemption of Customs Duty under EPCG Scheme. In the year 2009, in a similar situation the Customs authority had allowed the goods to be imported under the EPCG Scheme as the petitioner's company had filed application for special Notification and got the order for clearance before entering the goods in the territorial jurisdiction of India. xxx xxx xxx 4. That the averments made in paragraph-1 of the writ application, it is humbly submitted that the petitioner submitted a ....
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....ned Senior Standing Counsel for the Revenue. 14. In the light of the circumstances that arise in the fact situation narrated hereinabove, it is necessary for us to deal with the essential reasons cited by the Commissioner, Customs for rejecting the petitioner's communication dated 06.05.2016 for import of goods at zero customs duty at Dhamra port under the EPCG Scheme. 15. On perusal of the counter affidavits and stand of the Customs Authorities, it appears that the Commissioner, Customs had sought for clarification from the Central Board of Excise and Customs but, "the Board did not clarify the issue in as many words and instead directed the Commissioner to pass a reasoned order" and accordingly, the impugned order which has been passed by the Commissioner dated 11.08.2017 is subject matter of challenge here. 16. In the said order, (i) the Commissioner has proceeded on his understanding that when an application is made under the Proviso to Para-10 of Notification No.16/2015-Cus dated 01.04.2015 seeking a "Special Order" for declaring any other port, other than those listed in the Notification as eligible Port for EPCG Scheme, it is noted in the impugned order that such a ....
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....n as well as the Customs Act that any "Special Order" issued by the Commissioner would only, obviously be prospective and cannot be retrospective, in any event. Therefore, in the present case, it appears that the learned Commissioner has acted on an understanding that since the goods in question being imported under the EPCG Scheme had already been "unloaded" at Dhamra Port, the "Special Order" that he would issue would have to be retrospective to cover the date of unloading. This in our considered view is not consistent with the requirements of the Customs Act, 1962 nor with the relevant Notification No.16/2015- Cus dated 01.04.2015. The Notification No.16/2015-Cus dated 01.04.2015 has been issued by the Government of India in the Ministry of Finance (Department of Revenue) and the Central Board of Excise and Customs. It would be very important to take note of the fact that the said notification was issued by the CBEC in exercise of powers conferred by sub-Section (1) of Section 25 of the Customs Act, 1962 and the relevant Section is quoted hereunder: "Section 25. Power to grant exemption from duty.- (1) If the Central Government is satisfied that it is necessary in the p....
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....mported goods are ordinarily kept before clearance by Customs Authorities, consequently, the fact that the goods being imported by the petitioner under the EPCG Scheme, even as on date, remain within the "customs area" of the "customs port". Admittedly, no "clearance" has been granted yet by the Customs Authorities and, therefore, the goods remain (as on date) within the lawful custody of the Customs Authorities, the import journey cannot be stated to have been completed. In view of the aforesaid facts, even though the petitioner's imported goods have been unloaded at Dhamra port, any "special order" by the Commissioner of Customs would obviously be effective from the date of such grant of permission, since it is only after the Commissioner grants such "special order", that the petitioner can seek customs clearance of the goods and until such clearance is sought for and granted, the goods remain "in course of import" though physically located at Dhamra port but without obtaining the necessary clearances from the Customs Authorities as mandated under the Customs Act. In this context, we refer to the case of Indian Tourist Development Corporation Ltd. Vrs. Assistant Commissione....
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.... dated 01.04.2015 since admittedly the goods being imported even as on date remain in course of import awaiting necessary clearance from the Customs Authority. 19. We are of the considered view that the Commissioner of Customs has erroneously come to a finding that in the event he grants the petitioner's permission by issue of "special order" for import of the goods under the EPCG Scheme, in effect his order would be retrospective in operation. We reiterate that this fundamental basis is wholly erroneous and not in consonance with law. No doubt, the goods have been unloaded and that too after necessary permission was granted by the Dhamra Customs Authorities for berthing of the vessel. Further permission was granted by the Dhamra Customs Authorities for unloading of the cargo and it would be relevant also to take note of the fact that the Customs Authorities of Paradeep Port (port of registration) have also granted the petitioner with the necessary TRA requiring the petitioner and the Customs Authorities at Dhamra port to ensure due compliance of all terms and conditions under the EPCG Scheme and to report compliance thereof to the Customs Authorities at Paradeep. 20. In the ....
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....g of vessel as well as unloading of cargo from the authorities vested with the necessary power of the Customs Department. 22. Apart from the above, no sooner the vessel sought for berthing, the petitioner-company "registered the cargo" under the EPCG Scheme with Paradeep Authorities (registering Port) who granted the petitioner-company with a TRA for unloading at Dhamra Port. Consequently, the finding of the Commissioner of Customs to the effect, that the vessel had arrived in the territorial waters and had been berthed at Dhamra port and goods have been unloaded, without necessary lawful sanction by the Customs Authorities, is factually wholly incorrect. Even if the date of 09.05.2016 is accepted as the date on which the petitioner's application for issue of "special order" by the Commissioner was received at its office, all that had happened by the date of receiving such an application was that, the vessel had been permitted to berth at Dhamra port, the import manifest of the goods sought to be unloaded had been processed by the Customs Authorities at Dhamra port, the petitioner had take a necessary steps for registering the imported goods with the port of registration i.e.....
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....d have tantamounted to abdicating its own quasi judicial authority and jurisdiction. 25. It further appears that a further communication dated 27.03.2017 was issued by the Commissioner addressed to the Under Secretary where he has made suggestion to the statutory authority to include Dhamra sea-port in Table-2 annexed to the Notification No.16/2015 Customs dtd.01.04.2015. In the said letter, the Commissioner has requested the Board to consider including Dhamra port (petitioner) in Table-2. In the said communication, the Commissioner has noted as follows in para-4 that "xxx xxx xxx In the present case, it is seen that technically the import has already taken place xxx xxx xxx." He also refers to the definition of the term "import" contained in Section 2(23) of the Customs Act, 1962 which is quoted hereunder: "Section 2(23)- "import", with its grammatical variations and cognate expressions, means bringing into India from a place outside India." But clearly he has omitted to take into consideration the definition of the term "customs area" as contemplated under Section 2(11) and "customs port" as defined under Section 2(12). The "import" as contemplated under Section....
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....ioned Paradeep Port (as the port of registration). Accordingly, when the imported goods under the EPCG License arrived at the outer harbour of Dhamra port, necessary permission were sought for from the Customs Authority for berthing of the vessel and necessary permissions were obtained. Thereafter, the "import manifest" was placed with the Dhamra Customs Authorities and necessary permission was granted. In the meantime, the Customs Authorities at the port of registration i.e. Paradeep had granted the necessary TRA for the imported cargo and the cargo commenced unloading on 09.05.2016 (evening) i.e. admittedly, the very same day the Commissioner of Customs claims to have received the petitioner's application for grant of "special order" as contemplated under Proviso to Para-10 of the notification No.16/2015-Cus dated 01.04.2015. 28. It appears from the impugned order that in similar circumstances, the petitioner had imported goods in the year 2009 and has sought to distinguish the fact situation then by merely recording the fact that, whereas in 2009 the Customs had been informed before the goods been unloaded, in the present case, on the selfsame day the goods, in fact, have bee....
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....uge Giant cranes, which are so huge in dimension to be unloaded in any other port and then transported by any means i.e road/rail or otherwise to the site in view of its gigantic structure. Such type of cargo/equipment could only be delivered by ship and that too only at the port where such large size equipment would be finally installed. It appears also that the petitioner-company had already paid a sum of more than Rs. 230 crores to purchase such equipment and although, the application for issue of "special order" was received by the Commissioner of Customs on 09.05.2016, the goods remain at the port, without any order being passed for more than a year and four months until the impugned order dated 11.08.2017 under Annexure-1 came to be passed. 31. It would be relevant herein to note that the Government of India has prepared the EPCG Scheme with the avowed objective of encouraging creation of infrastructural needs of the nation and while allowing exemption of "zero percent" customs duty at the time of import, requiring such importer to ensure revenue generation of six (6) times of the customs duty concession given within the coming six (6) years. In other words, the importer h....