TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 719
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....etitioner, the Directorate of Revenue Intelligence (DRI) and the Customs Department. Since all the appeals question the correctness of common order dated 22.01.2019 passed in the Writ Petitions, they were heard together and are disposed of by this common judgment. For easy reference, the parties shall be referred as the petitioner, the DRI and the Customs. 2. W.A.Nos.236, 237 & 240 of 2019 have been filed by the Writ Petitioner. W.A.Nos.236 & 237 of 2019 are directed against the order in W.P.No.33269 & 33276 of 2018, in which the petitioner questioned the correctness of the seizure memorandum dated 01.12.2018 issued by the DRI. 2.1 W.A.No.240 of 2019 is directed against the order in W.P.No.540 of 2019, which was filed challenging the correctness of the order dated 01.01.2019, permitting the provisional release of the goods subject to conditions. 2.2 W.A.No.329 of 2019 has been filed by the DRI challenging the order in W.P.No.540 of 2019 and W.P.No.355 of 2019 has been filed by the Customs challenging the very same order. 3. For the sake of convenience, with the consent of the learned counsels appearing for the parties, W.A.No.240 of 2019, is taken as the lead case. The petitio....
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....gh their counsels filed an application under Section 110A of the Act on 19.12.2018, requesting for provisional release of the goods. In the said application, the petitioner stated that under similar circumstances, goods were released on execution of a bond and detention certificate for waiver of demurrage and container detention charges were also granted. Similar request was made by the petitioner in the said application under Section 110A of the Act. The Adjudicating Authority namely, the Additional Commissioner of Customs (Group-1), Chennai passed orders on 27.12.2018, permitting provisional release of the goods subject to three conditions namely, furnishing of bond equal to the value of the seized goods; bank guarantee/security deposit to cover the entire amount of differential duty; and bank guarantee/security deposit in lieu of fine and penalty amounting to 25% of the differential duty. This order was issued with the approval of the Commissioner of Customs, Chennai-II Commissionerate. Subsequently by another communication dated 01.01.2019, in continuation of the communication dated 27.12.2018, the same three conditions were reiterated , except a change in the value of the bon....
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....ified by the Sri Lankan authorities and there is no reason for the DRI to detain the consignment and grant provisional release imposing onerous conditions when similarly placed persons were permitted to clear the goods provisionally on furnishing of a simple bond. Reference was made to the circular No.35/2017-CUS., dated 16.08.2018, wherein the Central Board of Excise and Customs observed that depending on the specific nature of a case, the competent authority may, for reasons to be recorded in writing, increase or decrease the amount of security deposit as indicated in the circular. It is submitted that this condition in the circular was ignored by the department while passing the order dated 01.01.2019. Reference was made to a communication emanating from the Customs Authorities in Sri Lanka to the DRI, dated 06.12.2018, wherein it was stated that all certificates of origin pertaining to import of black pepper and Arecanuts from Sri Lanka were true and genuine, and issued by the competent authority at Sri Lanka and all the goods exported under the said certificates of origin were the produce of Sri Lanka. This communication is stated to have been forwarded to the petitioner by t....
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....tantiate the arguments advanced , the learned counsel referred to the decision of the Hon'ble Supreme Court in the case of Union of India vs. Lexus Exports Pvt. Ltd. [1994 (71) ELT 348 (SC)] and Commissioner of Customs, New Dehli vs. Euroasia Global [2009 (236) ELT 627 (SC)]. 6. It is further submitted that identical imports were effected through the Tuticorin Port and the goods were detained on similar grounds and such imports were effected by one M/s.Unique Spices, Kerala. The said importer filed Writ Petitions before the Madurai Bench of this Court in W.P(MD).Nos.997, 1023, 1027 and 1077 of 2019, praying for a direction upon the Customs Authority at Tuticorin to release and allow clearance of the Arecanuts imported by them as they were of Sri Lankan origin by taking into consideration the ISFTA Certificate issued by the Sri Lankan Competent Authority and as per the FSSAI Certificate. It is submitted that the said Writ Petitions were allowed as prayed for and the goods have also been released. It is submitted that the DRI has detained the consignments imported by the appellant doubting the Country of origin of the goods imported by the petitioner and in fact, the Director of....
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....arned Writ Court modifying the conditions imposed in the order dated 01.01.2019, more so when the matter is still under investigation. It is further submitted that in W.P.No.540 of 2019, the DRI was not impleaded as a respondent and therefore, they had no occasion to file a counter affidavit and hence, they have filed an appeal challenging the correctness of the order passed in the Writ Petitions. It is submitted that the Customs Department had filed a counter affidavit clearly setting out that contrary to the claim of the petitioner, the DRI during the course of investigation has mustered huge tranche of documents from several persons/entities involved in the transportation of the impugned goods which indicate that the goods declared to be wholly produced in Sri Lanka by the importer is not correct and the goods were merely transshipped through Sri Lankan territory. With regard to the contention of the petitioner that the validity of the certificates of origin, it is stated that the documentary evidence mustered during the course of investigation indicate that the certificates have been obtained from the competent authority of Sri Lanka by suppressing vital information that the go....
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....n a position to produce the export documents filed by the Sri Lankan exporter as they are not parties to the document, is a statement which should be rejected, since the value of the transaction is huge and nothing prevented the petitioner from requesting their exporter to furnish copies of those export documents filed in the Customs Information System of Sri Lanka and produce the same before the DRI/Customs. The fact that they have not produced the same till date would show that there is no genuineness in the claim made by the petitioner. 10. Ms.R.Hemalatha, learned counsel appearing for the Customs adopted the stand taken by the DRI and sought to sustain the order of provisional release dated 01.01.2019 by contending that the same has been passed in conformity with the circular dated 16.08.2017 issued by the CBEC. Further, it is submitted that the DRI is investigating the matter and in such circumstances, the discretion has been properly exercised by the Customs Authority and an order has been passed under Section 110A of the Act dated 01.01.2019 and there is no error in imposing such conditions. Further, it is submitted that the scope of judicial review on the powers exercised ....
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....y the Deputy Director of DRI, Chennai. 12. We have elaborately heard the learned counsels for the parties and given our anxious consideration to the facts and circumstances of the case. 13. The power under Section 110A of the Customs Act is a discretionary power vested with the adjudicating authority. The petitioner approached this Court challenging the seizure mahazar contending that the same is illegal. In the said Writ Petition, interim direction was issued by giving liberty to the petitioner to approach the authorities under Section 110A of the Act requesting for provisional release of the goods. In terms of Section 110A of the Act, any goods/documents/things seized under Section 110A, may, pending the order of the adjudicating authority be released to the owner on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require. The scope of judicial review on the exercise of such discretionary power is undoubtedly limited. The Court would be entitled to examine the correctness of the decision making process and whether there is any perversity in the exercise of such discretion, but may not substitute its opinion to the d....
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....suant to the treaty entered into between the two countries. The benefit of exemption notification can be extended, if the goods in question are of Sri Lankan origin. The document which is vital to establish the same is the certificate of origin. The controversy in the present case revolves around the genuineness of the certificates of origin produced by the petitioner. 14. Notification No.19/2000-Cus (NT), dated 06.03.2000 had notified the Customs Tariff (Determination of origin of goods under the Free Trade Agreement between the Democratic Socialistic Republic of Sri Lanka and the Republic of India) Rules, 2000. The said Rules were enacted in exercise of the powers conferred under Section 5(1) of the Customs Tariff Act, 1975. Rule 3 deals with' determination of origin' and it states that no product shall be deemed to be the produce or manufacture of either country unless the conditions specified in the rules are complied with in relation to such products, to the satisfaction of the appropriate authority. In terms of Rule 4, the importer of the product shall at the time of importation make a claim that the products or produce or manufacture of the Country from which they a....
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....ed reliance on the orders based on which the cargo which was permitted to be cleared by the Tuticorin Customs. Infact, the communication dated 29.01.2019, from the Additional Director, DRI Chennai to the Additional Commissioner of Customs, Tuticorin appears to be the "trumpcard" of the petitioner. We directed the Deputy Director, DRI to explain and he has taken a stand in the affidavit dated 12.02.2019. We examined the contents of the communication dated 29.01.2019, the arguments advanced by the learned Senior counsel and the stand taken by the Deputy Director, DRI in his affidavit. On a plain reading of the communication dated 29.01.2019, it is seen that the DRI has not given any clean chit based on the communication dated 06.12.2018, emanating from the Director of Exports, Sri Lanka. The communication has been enclosed along with the letter dated 29.01.2018 for ease of reference and for necessary action as deemed fit by the Additional Commissioner of Customs, Tuticorin. The letter further states that verification report for all 13 numbers of certificates of origin, which would be received from Sri Lanka Customs Authority will be communicated in due course. Therefore, the communic....
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....f he is of the firm view that the actions done by him are genuine, he will leave no stone unturned to vindicate his cause. The Deputy Director, DRI, Chennai during the course of his submission stated that statement has been recorded from the importer who appears to have stated that they have no agreements entered into between the petitioner and the Sri Lankan Exporter. We were rather surprised to be informed about the same, but however, we cannot take cognizance of the said submission, since the case is under investigation. 19. We find that the Sri Lankan Customs has addressed the Director General, DRI, New Delhi and furnished the names of two officers from the Central Intelligence Directorate to co-ordinate with the Indian Customs with the aim of sharing information and intelligence related to customs cases, according to law. This nomination is in terms of Rule 11 of the 2000 Rules notified vide notification dated 06.03.2000. In the same communication, the Sri Lankan Customs Authorities have requested the Director General DRI, New Delhi to furnish the names of Nodal Officers from their end and accordingly, it appears that two officers have been nominated by name and not by design....