TaxTMI 
TaxTMI 
2021 (3) TMI 910
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....ng Notification No.53(RE-2013)/2009-2014 dated 2.12.2013 (Annexure-"E") as ultra vires Section 5 of the Foreign Trade Act, ultra vires Section 14 of the Customs Act and ultra vires Article 14 and 19(1)(g) of the Constitution of India; and consequently striking down this Notification as ultra vires and unconstitutional; (B) That Your Lordship may be pleased to issue a Writ of Mandamus or a Writ of Certiorari or any other appropriate writ, order or direction quashing and setting aside Demand Notice F.No.VII/48-622/Gr-I/MCH/19-20 dated 16.8.2019 (Annexure-"D"); and be further pleased to direct Respondent No.2 herein to return and restitute Rs. 29,47,660/- collected from the petitioner as customs duty on two consignment imported in June, 2019 (detailed at Annexure-"F") with interest at appropriate rate; (C) Pending hearing and final disposal of the present petition, Your Lordship may be pleased to stay operation and implementation of Notification No.53(RE-2013)/2009-2014 dated 2.12.2013 (Annexure-"E") on the terms and conditions that may be deemed fit by this Hon'ble Court; (D) Pending hearing and final disposal of the present petition, Your Lordship may be pleased to restrai....
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....8.2019 was issued by the second respondent in respect of 9 bills of entry for importing the above referred commodity during May, 2018 to Feb, 2019 invoking Notification No.53 (RE- 2013)/2009-2014 dated 2.12.2013 issued by the Director General of Foreign Trade (for short "DGFT") prescribing the Minimum Import Price (for short the "MIP")of Rs. 288/- per Kg for Cashew Kernels Broken and Rs. 400/- per Kg for Cashew Kernel whole and asked the petitioners to pay differential customs duty for all the 9 consignments and corresponding 9 bills of entry on the basis that the duty assessed and paid were on the basis of transactional value whereas customs duties were chargeable on the MIP prescribed by the DGFT under the above referred Notification. 4.6) As the officers of the respondent no.2 insisted on payment of customs duties on two consignments of broken cashew kernel imported by the petitioners in June, 2019 in view of the notification no. 53 dated 2.12.2013 issued by the DGFT , the petitioners had to agree for paying customs duties for two consignments on the basis of MIP of Rs. 288 per Kg for two bills of entry filed on 15.06.2019 and 19.06.2019 as these consignments were not assessed....
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.... the Board to fix and notify the "tariff value" of any class of imported goods or exported goods and duty of custom is to be charged with reference to such tariff value. It was pointed out that section 14 of the Customs Act is a complete Code for valuation of the imported goods for the purpose of assessing and recovering custom duties and therefore, the notification no. 53 issued by the DGFT under section 5 of the Foreign Trade Act for valuation of imported goods is without any jurisdiction and authority of law. 8.The learned advocate Mr. Dave further submitted that the value or the price so specified by virtue of the notification issued under section 5 of the Foreign Trade Act cannot be considered as the transaction value as per section 14 of the Customs Act and the power and jurisdiction to fix and specify any price other than the transaction value for the purpose of assessing and collecting custom duties on such price/value is only under sub-section (4) of section 14 of the Customs Act and therefore, the MIP as tariff value for any imported goods including cashew kernel can be fixed and notified only by the Board while exercising powers under section 14(2) of the Customs Act. I....
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....Anti- Dumping Duty, Safeguards duty and such other levy under section 8A, 8B and section 9A of the said Act and notification can be issued by the Central Government for providing for differential tariff or differential value of the goods so notified. It was therefore, submitted that the Central Government cannot have any jurisdiction or power under the Foreign Trade Act for imposing differential tariff or for specifying differential value/price of the imported goods, as there are sufficient safeguards under the Customs Act and under the Customs Tariff Act for the same. It was therefore, submitted that the impugned notification no.53 issued under the Foreign Trade Act which is only meant for the development and regulation of Foreign Trade, is contrary to the provisions of the said Act. 12. Referring to the impugned notification which was issued in the year 2013, prescribing MIP of Rs. 288/- per kg of cashew kernel (broken), it was submitted that such notification is contrary to Article 14 the Constitution Of India, firstly, on the ground that the price is fixed on an artificial basis as far back as in December 2013 which continued even when the petitioner imported the commodities i....
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....accordingly and, therefore, there is no justification in raising any demand that too on the basis of MIP fixed under impugned notification on the basis of differential value of the actual transaction value and the value fixed by the impugned notification. 17. The learned advocate Mr. Dave placed reliance upon the decision of the Calcutta High Court in case of Bimal Kumar Modi v. Union of India reported in 2014 (306) E.L.T. 97 (Cal) and in case of S. Mira Commodities Pvt. Ltd v. Union of India of Madras High Court reported in 2009 (235) E.L.T. 423 (Mad), wherein it is held that the Government and DGFT do not have any power under section 5 of the Foreign Trade Act as well as the Foreign Trade Policy to fix and prescribe MIP for any goods imported in India and that such price fixation and notification issued for that purpose were unconstitutional. The petitioners therefore, have challenged the constitutional validity of the impugned notification no.53 on the same grounds which were considered by the Madras High Court and Calcutta High Court in the above judgments. The learned advocate Mr. Dave therefore, prayed that on similar grounds as considered by the Madras High Court and the Ca....
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....reasonable restrictions viz. Port Restrictions, Imposition of Minimum Market Price and quota Restrictions It was submitted that despite imposition of Import Duty on the commodities in question by permitting imports lead to considerable distress amongst the farmers in India, the Government was constrained to take steps to protect the farming community. It was submitted that by Notification dated 12.06.2019, import of cashew nuts is permitted on certain conditions by prescribing MIP. 21. The learned advocate Mr. Divyeshwar submitted that the petitioner has misclassified imported goods i.e. Cashew Kernel Broken by classifying them under CTH 08013290 instead of CTH 08013210. It was submitted that the Petitioner has violated the conditions as prescribed under the Notification No.53(RE-2013)/2009-2014 dated 02.12.2013, violated the provisions of Para 2.01 of Foreign Trade Policy, 2015-2020 and Section 46(4) of the Customs Act, 1962 as the petitioners were required to declare correct details/particulars in Bill of Entry being filed by them. It was submitted that according to Section 111(m) of the Customs Act, the goods imported by the Petitioner were 'restricted goods' as they we....
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....ers by putting various kinds of reasonable restrictions like port restrictions, imposition of minimum market price, quota restrictions, etc. 24. In view of the above, the learned advocate Divyeshwar submitted that no interference is required to be made in the present petition, as the petitioners in order to avoid the adjudication process as per the provisions of Customs Act, has challenged the constitutional validity of the notification no. 53 of 2013 which was existing for all these years and the same cannot be held to be unconstitutional, contrary to the provisions of the Customs Act, Foreign Trade Act and Foreign Trade Policy. 25. Having heard the learned advocates for the respective parties and having gone through the materials on record, only short question which arises for consideration of this Court is as to whether the notification no. 53 dated 2.12.2013 can be held ultra vires to the provisions of the Customs Act and the Foreign Trade Act as well as to the Article 14 of the Constitution of India or not? 26. With regard to the preliminary issue raised by the respondents regarding maintainability of the petition as the petitioner has challenged the Constitutional validity....
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....ngle it is viewed and accordingly, the same was quashed and set aside. However, Madras High Court in case of S. Mira Commodities Pvt. Ltd (supra), considering the similar notification dated 4.6.2008 issued by the DGFT with regard to restricting the import of betel nuts valued at Rs. 35/- or more per kg., held that the DGFT has no power to issue the notification under section 5 read with section 6(3) of the Foreign Trade Act on artificial basis. It was further held that no material data has been furnished for arriving at the figure of Rs. 35/- per kg of the betel nuts imported when the market of betel nuts require 90% import and the free import policy has been evolved for such import and the said notification goes contrary to such policy. 31. This Court in case of Premium Pulses Products & Kusum Agency (supra), while considering such notification issued by the Central Government under section 3 of the Foreign Trade Act, held as under : "12. A perusal of the impugned notification reveals that by virtue of such notification the Central Government, in exercise of powers conferred by section 3 of the Act read with paragraphs 1.02 and 2.01 of the Act as amended from time to time, has ....
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.... has not exercised powers under section 3 of the Act but has merely authenticated an order which relates to the Directorate General of Foreign Trade in accordance with the Authentication Rules. The contention that the impugned notification has been issued by the DGFT in exercise of powers under section 3 of the Act, and is, therefore, ultra vires sub-section (3) of section 6 of the Act, does not merit acceptance." 32. The Supreme Court by order dated 28.1.2019 has dismissed the SLP (C) 1922/2019 against the aforesaid judgment of this Court. 33. Thus from the above judgment of this Court it is clear that DGFT has not exercised powers under section 3 of the Foreign Trade Act but has merely authenticated an order which relates to the DGFT in accordance with the authentication rules. Therefore, the contention raised by the petitioners that DGFT has no authority to issue such notification is not sustainable in view of above dictum of law. 34. With regard to the contention of the petitioners that the price fixed by the DGFT in the year 2013 did not vary and therefore, the same is without any rationale, it is emerging from the facts that the petitioner having accepted such price for tw....