AI Drafter 
TaxTMI 
TaxTMI 
2022 (3) TMI 1229
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....th dated 9th January, 2020 issued by Respondent No. 3 (being Exhibits "A" and "B" hereto); (b) this Hon'ble Court be pleased to issue a Writ of Mandamus, or a Writ in the nature of Mandamus, or any other appropriate Writ, Order or direction under Article 226 of the Constitution of India ordering and directing the Respondent No.2 (their servants, agents and successor in office) to forthwith (i) allow the amendment of the IGM. Nos. 2239803, 2240493, 2240974 and 2241062 filed on 25th November, 2019, 7th December, 2019, 9th December, 2019 and 14th December, 2019 respectively to substitute the name of the Respondent No. 5 as the importer in place of the Respondent No.4; (ii) to cancel Bill of Entry Nos. 5862748 dated 28th November, 2019, 5987411 dated 7th December, 2019, 6005868 dated 9th December, 2019 and 6021988 dated 10th December, 2019 filed by the Respondent No.4; and (iii) permit the Respondent No.5 to file bills for entry in respect of consignments covered by Bill of Lading Nos. AGNJEANSA00465 dated 20th November, 2019, ASCOKHLNSA1900054 dated 10th March, 2020, MSLJEANSA2521 dated 15th June, 2020 and ASCOKHLNSA1900063 dated 10th March, 2020 respectively and to assess th....
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.... continues to be the owner of the consignment. The claim of ownership is made by Rekhatex on the strength of the original BOLs which are still in its possession. According to Rekhatex, mere filing of BOEs will not confer ownership on Shine Metal, but the possession of the BOLs determines ownership. Shine Metal abandoned the goods as they failed to make the payment, resultantly, Rekhatex continues to be the owner. 5. The department disputed the claim of ownership of Rekhatex on the consignment. According to them, Shine Metal being the importer, is the owner of the goods. Considering the rival claims, the grant of relief in this writ petition depends on the answer to the question whether Rekhatex undisputedly is the owner of the goods and in the event of a dispute as to the title of the goods, is it open for us to decide this disputed question considering the law laid down by the Supreme Court and in view of the materials placed before us. 6. SUBMISSIONS ON BEHALF OF THE PETITIONER: - In order to establish the claim of ownership in respect of the consignment, learned counsel Mr. Shah for Rekhatex submitted as under: (a) The seized goods are freely importable and imp....
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.... the goods on payment of fair value. (f) No reply is filed by either of the respondent nos. 2 to 4 disputing the correctness of the documents produced by Rekhatex in its additional affidavit dated August 30, 2021. (g) Without prejudice and in any event, Shine Metal claimed the goods through Rekhatex. This is evident from the purported BOEs filed by Shine Metal. Shine Metal has given details of the commercial invoices of Rekhatex in the purported BOEs filed by Shine Metal. (h) The DRI's reliance on the claim for exemption under the 1999 Notification in the BOEs filed by Shine Metal does not advance the case of the Commissioner of Customs and the DRI, as Shine Metal could not have filed BOEs without possessing the originals of BOLs and other documents. In any event, the claim of Shine Metal for exemption is not allowed by the respondents. (i) No disputed questions of facts are involved in the present proceedings. The so-called dispute on the title to the goods by the Commissioner of Customs and the DRI in their respective affidavits is based on the assumption that Shine Metal has the original BOLs. This assumption is factually incorrect and contrar....
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....the Notification. (ii) Intelligence was also gathered that out of these three firms, M/s. Chandrashekhar Industries and Shine Metal Industries were working under the control of Shri Jayant Shantilal Mirani, owner of M/s. Nikom Copper & Conductors Private Limited who had also done most of the high sea sales of most of the firms. (iii) Searches were carried out at the registered premises of the said firms, residential premises of the proprietors, residential and their office premises on December 16, 2019. During the search operations, it was noticed that all these firms did not have any facilities/machineries to manufacture 'lead wires for electronic parts' in their respective factory premises which were required to be manufactured as per the 1999 Notification. (iv) The statement of Shri Kuldeep Ramesh Kshirsagar, proprietor of Shine Metal was recorded. He confessed that he had never manufactured Lead Wire for Electronic Parts (LWEP) in the factory premises of Shine Metal. He also admitted that most of the imported ETP Copper Wire Rods had been sold in the open market and the factory was not having any facility to manufacture LWEP. Shri Kuldeep Kshirsagar a....
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.... said consignment imported by Shine Metal under various BOLs, was on the basis that it was not eligible to claim benefit of the 1999 Notification. The goods could be released provisionally under section 110 of the Customs Act. (xi) The show cause notice dated December 1, 2020 issued by the Principal Additional Director General, DRI, Zonal Unit Ahmedabad is yet to be adjudicated. STAND OF SHINE METAL: - 8. An affidavit-in-reply is filed on behalf of Shine Metal through its proprietor Shri Kuldeep Ramesh Kshirsagar. The gist of the affidavit is that Shri Kshirsagar was asked to incorporate a proprietorship firm in his name by Shri Jayant Mirani and Shri Mukesh Jain as they were having technical difficulties to form a new firm. Shri Jayant Mirani and Shri Mukesh Jain informed Shri Kshirsagar that he would be a name sake proprietor of the firm and they would be looking after day-to-day activities of the said firm in ordering materials, machinery, maintenance, transport, office rent, factory rent, salary and wages including all bank account transactions. The necessary charges for incorporating the company were borne by Shri Mukesh Jain. The entire business was handled by ....
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....oods has not passed from the exporter to the importer clearly the exporter may be permitted to re-export the goods. But if the title has passed to the importer, there is no question of the goods being re-exported at the instance of the foreign exporter. 5. The High Court appears to have proceeded on the erroneous assumption that in ail cases an exporter continues to be owner of the goods merely because the importer does not choose to clear them and in effect abandons them. The issue regarding title to the goods had been squarely raised by the appellants in their counter affidavit filed before the High Court wherein they said that the title in the goods had passed on to M/s. Rahul Associates. The appellants have also drawn our attention to the invoice whereby the goods have been stated to have been sold to M/s. Rahul Associates. It is also claimed that the allegations contained in the counter affidavit have not been refuted by the respondent. According to the appellants the respondent and M/s. Rahul Associates were conspiring together to evade payment of duty in respect of an earlier consignment of identical goods which had arrived two weeks prior to the shipment in questio....
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....mporter, is the owner of the goods, placing reliance on several documents. Let us now proceed to find out the answer in the light of the dictum laid down by Their Lordships in J. P. Electronics Pvt. Ltd. (supra). 12. Rekhatex claims to be the owner of the consignment on the strength of the original BOLs which it claims to be in possession and custody. According to Rekhatex, Shine Metal never had the custody of these original documents of title and could not have filed the BOEs for the said consignments. It is then the stand of Rekhatex that assuming without admitting that the particulars of Shine Metal were entered as the importer in the BOEs, Shine Metal does not become the owner of and/or entitled to the said consignment. 13. It is the case of the Department that on the basis of willful mis-declaration and after getting permission of import of goods as per details mentioned in the IEC of Shine Metal, they would sell the goods in open market without manufacturing lead wire for electronic parts in breach of the 1999 Notification. The goods were seized at M/s. Kerry Indev Logistics CFS at Navi Mumbai, under seizure memo dated January 9, 2020. On the basis of the available reco....
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....s Sagun Copper. 17. It is material to note that there is no affidavit-in-reply on behalf of Sagun Copper. A reference, however, needs to be made to a communication dated November 24, 2020 made by Sagun Copper to the Customs Department. The said communication is brought on record by Rekhatex. In paragraph 5 of such communication, it is clearly stated that "Rekhatex, on or about 9/10-3-2020 and thereafter, sold the said goods to Sagun Copper and that original import documents and original BOLs are in the name of Sagun Copper." A request was, therefore, made for change of name in the IGM from Shine Metal Industries to Sagun Copper and to allow substitution/filing fresh BOEs in the name of Sagun Copper for clearance of the goods for home consumption. It is then stated that Sagun Copper will be clearing the goods on payment of full duty on merit for home consumption. 18. In the advocate's notice dated January 8, 2021 (almost one year after the seizure) issued to the Customs Department on behalf of Sagun Copper, it is mentioned that the goods are abandoned by original importer Shine Metal and as the goods are now transferred in favour of Sagun Copper along with the documents of tit....
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....as hatched, implemented and supervised by Shri Jayant Mirani. It is the case of the Customs that Shine Metals do not have any infrastructure to manufacture lead wire and hence, Shine Metal was instrumental in diverting the said consignment in open market in breach of the 1999 Notification. 22. It is also pertinent to note that neither any proceedings are initiated by Sagun Copper to clear the goods though they claim to be the purchasers, nor have they filed any response to this writ petition. This writ petition was filed by Rekhatex on February 3, 2021. Even on such date, Rekhatex claims to have title over the goods. However, the record indicates that the goods were sold by Rekhatex to Sagun Copper in March, 2020 itself. Nothing has been placed on record by Rekhatex clarifying how the title in the goods have again passed on to Rekhatex. We also note here, at the cost of repetition, the request made by Sagun Copper through their advocate's letter dated January 8, 2021 for change of name of importer in the IGM and substitution of the BOEs in its name was not entertained by the Customs on the ground that a show cause notice has been issued by DRI which is required to be adjudicated....
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....ecessitate an in-depth inquiry before rendering a factual finding regarding ownership of the consignment which may not be possible for us to do so in this writ petition under Article 226 of the Constitution of India. 25. The illegality or otherwise of seizing the goods could be gone into only if Rekhatex were in position to demonstrate that its title over the goods is undisputed. 26. We may also deal with the contention of learned counsel for Rekhatex that it continues to be the owner as Shine Metal abandoned the consignments. Rekhatex and Shine Metal had a business transaction. The DRI realized that Shine Metal is evading payment of customs duty by unlawfully availing the benefit of exemption under 1999 Notification. Shine Metal had submitted the Bills of Entry for home consumption. After the seizure of the consignment, Rekhatex alleged that Shine Metal failed to pay the purchase price. The show cause notice was issued by DRI in respect of the seized consignment which is required to be adjudicated. We therefore do not find force in the contention of Rekhatex that this is a case of abandonment of goods. 27. The stand of the Department that the documents viz. BOEs, BOLs and....
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....osing any penalty on any person shall be made under Chapter XIV unless the owner of the goods or such person is noticed. Even otherwise, the goods are seized upon Shine Metal submitting the BOEs and not from Rekhatex. 30. We may now deal with the decisions relied upon by Rekhatex in support of its case. Strong reliance is placed on the decision of the Supreme Court in Sampat Raj Dugar (supra) to contend that the definition of 'importer' in the Customs Act only indicates person who is in possession of the goods at the time of filing of the Bills of Entry but does not indicate the title to the goods. Sampat Raj Dugar (supra) was relied by the Supreme Court in Vellanki Frame Works versus Commercial Tax Officer, Visakhapatnam (2021) 3 SCC 39. For guidance, we borrow paragraphs 34, 35, 36 and 37 from the decision in Vellanki Frame Works (supra) which reads thus: - "34. To get over the aforesaid findings of the High Court, learned counsel for the appellant has argued, with strong reliance on the decision of this Court in the case of Sampat Raj Dugar (supra), that the definition of importer in the Customs Act only indicates the person who is in possession of goods at the time ....
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.... (3) If the proper officer is satisfied that the import manifest or import report is in any way incorrect or incomplete, and that there was no fraudulent intention, he may permit it to be amended or supplemented. 47. Clearance of goods for home consumption.- (1) Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption: 36. It is but apparent that that while bringing anything into India from a place outside India is generally regarded as "import" and the imported goods are those goods which are brought into India from a place outside but, when the goods are cleared for home consumption, they are no longer imported goods for the purpose of the Customs Act. Significantly, in the process of importation, the importer, in relation to any goods, includes any owner or any other person holding himself to be the importer but, only between the time of their importation and their clearance for home consumption. In ot....
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....nsideration in Canon India Private Limited (supra) was whether after clearance of the cameras on the basis that they were exempted from levy of basic Customs duty under Notification No.15/2012, the proceedings initiated by the Directorate of Revenue Intelligence for recovery of duty not paid under Section 28(4) of the Customs Act, 1962 are valid in law. In Canon India Private Limited (supra), there was no dispute of ownership, the decision therefore does not assist Rekhatex in any manner. 33. Reliance is then placed on the decision of the Supreme Court in the case of ITC Limited versus Commissioner of Central Excise, Kolkata IV (2019) 17 SCC 46. Even this decision does not support the case of Rekhatex. The question involved in ITC Limited (supra) was whether in the absence of any challenge to the order of assessment in appeal, any refund application against the assessed duty can be entertained? The ratio of the said decision, therefore, has no bearing on the present case. 34. Reliance is then placed on the decision of this Court in M/s. Nikom Copper Conductors Private Limited (supra). Learned counsel for Rekhatex submitted that the present case is squarely covered by the deci....