AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 515
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....is Aracknut and one consignment in two containers is black pepper (these 45 consignments shall hereinafter be collectively referred to as 'said consignment' and wherever they need to be referred to based on the consignment, 44 consignments in 88 containers shall be referred to as 'Aracknut consignment' and one consignment in two containers shall be referred to as 'Black pepper consignment'). (c) With regard to said consignment, writ petitioner filed 45 Bills of Entry for clearance of said consignment on the basis of 'South Asian Free Trade Agreement' ('SAFTA' in brevity) and 'Indo Sri Lanka Free Trade Agreement' ('ISFTA' for brevity). To be noted, relevant statute in this regard is 'Customs Act, 1962 [Act 52 of 1962]' (hereinafter 'Customs Act' for brevity) and the 'Customs Tariff Act, 1975' (hereinafter 'Customs Tariff Act). (d) Contending that said consignment originates from Sri Lanka, concessional rate of duty was claimed by the importer as SAFTA provides for concessional rate of duty for Black pepper and ISFTA provides for concessional rate of duty for Aracknut, if consignment....
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....ut supra, besides giving short facts has also captured the trajectory of legal proceedings thus far. 3 This Court now proceeds to advert to the submissions made in the hearings and embarks upon the exercise of dispositive reasoning qua such submissions for returning a verdict. 4 Mr.P.Chidambaram, learned Senior Counsel appearing on behalf of counsel on record for writ petitioner, learned Additional Solicitor General Mr.G.Rajagopalan leading Mr.V.Sundareswaran, learned Senior Panel Counsel for respondents 1 and 2 besides Ms.R.Hemalatha, learned Senior Panel Counsel (Customs) for third respondent were heard. 5 When this writ petition was listed for admission on 10.6.2019, limited notice was issued vide proceedings / orders came to be passed. This court considers it appropriate to extract and reproduce the said proceedings / orders as it captures the nature of limited notice that was issued by this court and more importantly, it captures the pivotal and primordial submission of the writ petitioner in assailing the impugned SCN. 10.6.2019 proceedings of this court reads as follows : "Mr.P.Chidambaram, learned Senior Counsel, leading the counsel on record for the sole ....
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....tition is filed before the High Court, we request the High Court to consider the prayer for interim directions expeditiously on its own merits after hearing all concerned. Special Leave Petitions are disposed of in the above terms. Pending applications, if any, stand disposed of." [Underlining made by Court to highlight and supply emphasis] 9. It was submitted by learned Senior Counsel for writ petitioner that the instant writ petition has been filed assailing the aforesaid show cause notice dated 5.5.2019 bearing Ref F.No.DRI /CZU/VIII/48/ENQ-1/INT-36/2018 (hereinafter 'impugned SCN' for brevity), pursuant to the aforesaid order of Hon'ble Supreme Court dated 8.5.2019. 10. As the writ petition is one assailing the show cause notice i.e., impugned SCN, the writ petitioner was called upon to make submissions on whether the case on hand falls within well carved out exceptions adumbrated in a long line of authorities where writ petition will be entertained against a SCN. To be noted, learned Senior Counsel submitted that there can be no disputation that aforesaid order of Hon'ble Supreme Court dated 8.5.2019 and more particularly, th....
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....revity), powers are vested only with the Director (International Customs Division) and paragraph 9 reads as follows: "9. All requests for verification under Free/Preferential Trade agreements/CECA/CEPA should be addressed in the Board to: Director (International Customs Division) Central Board of Excise & Customs, Department of Revenue, Ministry of Finance, Room No.49, North Block, New Delhi-110 001. 011-2309 3380 (off); 011-2309 3760 (fax.) Email: [email protected]." 15. Adverting to the aforementioned Office Memorandum dated 11.7.2017, it was submitted that the aforesaid Director (International Customs Division) is now part of a Directorate, which is headed by a Principal Commissioner Headquartered in Delhi. Specific reference was drawn to paragraph 2.1.C. captioned (FTA) and subclause (iv) thereto of the Office Memorandum dated 11.7.2017 in this regard. 16. In sum and substance, it was contended that the impugned SCN has been issued without jurisdiction by the first respondent. To be noted, it is the specific submission of learned Senior Counsel for writ petitioner that both respo....
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....dent to make submissions, but it is open to learned counsel for third respondent to file counter-affidavit, if the third respondent chooses to do so. If the same is not done by next listing, the matter will be heard based on the pleadings of respondents 1 and 2. 24. Revenue Counsel undertakes to file counter-affidavit by 14.6.2019, after giving advance copies to learned counsel for writ petitioner and counsel for writ petitioner may file rejoinder, if any (which shall be entertained only if it contains new facts), by 17.6.2019, with advance copies to Revenue counsel. 25. List on 17.6.2019 under the caption 'NOTICE REGARDING ADMISSION'." 6 It is important to note that learned Senior counsel for writ petitioner fairly submitted that there is no disputation that though instant writ petition has been filed pursuant to aforementioned order of Hon'ble Supreme Court dated 08.05.2019, it is subject to writ petitioner making out a case for interference qua writ jurisdiction at SCN stage. This is captured in the last few lines / last sentence in paragraph 10 of the aforesaid order / proceedings of this Court dated 10.06.2019. Likewise, the crux and gravamen o....
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....o been made by the Central Government in exercise of its rule making power under section 5(1) of Customs Tariff Act. 9 Elaborating on his pivotal and primordial submission, learned senior counsel for writ petitioner drew the attention of this Court to Rules 4,11,12 and 13 of ISFTA Rules and Rules 14 and 15 of SAFTA Rules. Considering the significance of these provisions, this Court extracts the aforesaid rules and the same reads as follows : "Rules 4, 11, 12 and 13 of ISFTA Rules : 4.Claim at the time of importation.- The importer of the product shall, at the time of importation- (a)make a claim that the products are the produce or manufacture of the country from which they are imported and such products are eligible for preferential treatment under the India-Sri Lanka Free Trade Agreement, (hereinafter referred to as the Agreement), and (b)produce the evidence specified in these rules. Explanation:- For the purposes of this notification, "Preferential treatment" in relation to any product means the exemption granted under the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.26/2000- Custo....
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....hen there is a dispute regarding COO, request for verification under preferential trade agreements (SAFTA and ISFTA in this case) should be addressed to the Director (International Customs Division). To be noted, these aspects of the submission have been captured in paragraphs 12, 13 and 14 of 10.6.2019 proceedings which have been extracted and reproduced supra. 11 Furthering his submission in this direction, it was submitted that SAFTA and ISFTA rules are treaties between two sovereign States and therefore they have to be treated with utmost sanctity and should be regarded as sacrosanct. 12 Responding to the aforesaid submissions, learned Solicitor submitted that there is an agreement styled 'Agreement between the Government of the Republic of India and the Government of the Democratic Socialist Republic of Sri Lanka on Co-operation and Mutual Assistance in Customs matters' ('CMA Agreement' for brevity) dated 13.3.2015 between the Governments of India and Sri Lanka, vide two communications dated 23.04.2018 and 15.05.2018, officers have been appointed by name (not designation) inter-alia for exchange of information qua COO under CMA Agreement. Learned Solicito....
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....Secretary the court may, in a proper case, require an affidavit of the Minister himself. The affidavit should show that each document in question has been carefully read and considered, and the person making the affidavit is satisfied that its disclosure would lead to public injury. If there are a series of documents included in a file it should appear from the affidavit that each one of the documents, whose disclosure is objected to, has been duly considered by the authority concerned. The affidavit should also indicate briefly within permissible limits the reason why it is apprehended that their disclosure would lead to injury to public interest. This last requirement would be very important when privilege is claimed in regard to documents which prima facie suggest that they are documents of a commercial character having relation only to commercial activities of the State. If the document clearly falls within the category of privileged documents no serious dispute generally arises; it is only when courts are dealing with marginal or borderline documents that difficulties are experienced in deciding whether the privilege should be upheld or not, and it is particularly in respect o....
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....n cannot be made before a Single Judge of this court and it is a matter of judicial discipline that correctness or otherwise of a Division Bench recording cannot be examined by a Single Judge. It is for the respondents to seek a review before Hon'ble Division Bench. Admittedly, no such review has been filed before Hon'ble Division Bench. Therefore, such a submission ought not to have been made that too on a sworn affidavit before a Single Judge, i.e., this Court and this court as a matter of judicial discipline refrains from examining this aspect and this court eschews this submission of respondents 1 and 2. In this regard, this court considers it appropriate to extract relevant portion of paragraph 6 of this affidavit, which reads as follows: "6... It is further submitted that the two communications referred to above whereby the nodal officers were nominated are appointed under the agreement of the year 2015 and not under rule 11 of the Notification No.19/2000-Cus NT dated 06/03/2000 as observed by the Division Bench in WA No.329/2019 and in the circumstances this Hon'ble Court may be pleased to record the objection for disclosure and thus render justice." ....
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....ontainers had arrived at Sri Lanka, offloaded for transshipment and the details of vessels loaded onto for transshipment of the containers to India. As per the letter the 62 containers had arrived to Sri Lanka for transshipment in four vessels namely Northern Jupiter, Em Astoria, City of Beijing and Ever Dynamic and got loaded onto three vessels namely MSC Maria Laura, Ever Delight & OEL Shravan (voyage no.18060) destined to India. For ease of understanding, the details furnished by Sri Lanka Customs for the 62 containers is shown in Table 1 below in respect of one of the 62 containers Table 1 S/N Container No. Status Discharge vessel/voyage Loading vessel/voyage Load Date 1 XINU1366335 Transshipment Northern Jupiter/803E Ever Delight V.124E 16-10-18 ii.Director of Customs, Central Intelligence Unit, Sri Lankan Customs vide further letter CIU/DRI/INF/08/2018 dated 19/11/2018 (RUD-12) in respect of 26 (88-62) containers of areca nuts also confirmed that the consignments were transshipped through Sri Lanka by providing additional details of discharge vessel, discharge date, loading vessel and loading date. As per the letter the 26 conta....
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....tion is India, Vessel is OEL Shravan, Voyage No./Date is 18060 - 14/10/2018, 1080 Bags of black pepper, quantity as 54000 Kg and in 40 ft containers TCNU3476980 & TLLU5204024. The system generated Cargo Dispatch Notes bearing numbers C26325 and C26324 enclosed along with them show the seal numbers of the containers as G4266296 and G4266295 respectively. 11.In pursuance of the above as well as the independent evidences mustered (discussed in subsequent paragraphs below at paras 19 to 32), all the 44 consignments (88 containers) of areca nuts and 1 consignment of black pepper (2 containers) totally valued at RS.49.28 Crore were placed under seizure vide seizure memorandum dated 01/12/2018 (RUD-14) on the reasonable belief that the country of origin of the goods has been mis-declared and therefore the goods are liable for confiscation under the provisions of the Customs Act 1962. 12.Subsequently, two letters which were not solicited were received in this office from the Director of Exports, Export Directorate, Sri Lanka Customs, suo moto. The first letter no.CUS/EXP/MISC/04 dated 30/11/2018, the Director of Exports, Sri Lanka Customs (RUD-15), inter alia stated that ....
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....hin the meaning of Article 73(1)(b) of the Constitution of India and they are traceable to Entry 14 of List I of Seventh Schedule to the Constitution of India. In this regard, Article 51(c) of the Constitution of India is also of relevance. SAFTA rules and ISFTA rules in contradistinction are municipal laws in international law parlance. Be that as it may, the same cannot be said of CMA agreement dated 13.3.2015 between Governments of India and Sri Lanka. Being an agreement made between two sovereign States, this CMA agreement also certainly qualifies as part of treaties (if not a treaty by itself) for the purpose of mode of implementation of treaties. Therefore, in the light of section 151B(5) of Customs Act which has been alluded to supra, this Court has no hesitation in coming to the conclusion that CMA agreement dated 13.3.2015 will prevail over the procedure for verification of COO adumbrated in SAFTA Rules and ISFTA Rules as this CMA agreement also has been signed by two sovereign States. As already alluded to supra, entire section 151B was brought into the Customs Act on and with effect from 29.03.2018 by the Finance Act, 2018 (Act 13 of 2018) and this court deems it appr....
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.... corresponding to any of the provisions of this Act or dealing with offences in that country corresponding to any of the offences under this Act.]" 21 Therefore, this court deems it appropriate to not to interfere with the impugned SCN by holding that it is open to respondents 1 and 2 to issue an addendum or corrigendum to impugned SCN adverting to CMA agreement and mentioning as to how COOs were verified and as to why they are unacceptable, in an appropriate manner without disclosing the contents of aforesaid communications dated 23.4.2018 and 15.5.2018 (immunity / privilege for which has been sustained). If it is done, it will give adequate opportunity to writ petitioner noticee to meet the impugned SCN better with greater specificity on merits. If respondents 1 and 2 do not issue addendum / corrigendum within a fortnight from the date of receipt of a copy of this order, it is open to writ petitioner to respond to impugned SCN raising this issue also. 22 The reason why this court refrains from interfering with the impugned SCN is owing to the principle that writ jurisdiction being a discretionary jurisdiction will ordinarily not be exercised for quashing a SCN and that it w....