TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 271
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Bond Bills of Entry for warehousing in respect of imported goods, namely crude palm of edible grade. On September 21, 2021 and September 28, 2021, the importers filed Ex-bond Bills of Entry for home consumption against above mentioned Into Bond Bills of Entry. The customs duty involved in the Ex-Bond Bills of Entry was of Rs. 47.82 crores. On October 8, 2021, the importer filed an application for withdrawal/cancellation of the said Ex-bond Bills of Entry filed on September 21, 2021 and September 28, 2021 and reinstatement of Into Bond Bill of Entry. 3. On October 13, 2021, by way of notification number 48/2021-CUS and notification number 49/2021-CUS, rate of basic custom duty (BCD) was reduced from 2.5% to Nil and rate of agriculture infrastructure development CESS (AIDC) was reduced from 20% to 7.5% with effect from October 14, 2021. The importer made a request on October 8, 2021, which was rejected on October 27 2021 by the Assistant Commissioner of Customs, (Apprising Group-1) on the ground that the application dated October 8, 2021 was inadequate. The importer that is M/S Emami Agro Tech Limited, submitted his explanation and provided chartered accountant certificate, and det....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oner of Appeals held that if the bills of entry for home consumption was allowed to be withdrawn/cancelled and the fresh bills of entry for home consumption was allowed for clearance of the impugned goods from warehouse, there would be a substantial loss of revenue. Being aggrieved, thereby an appeal was filed before the CESTAT which was allowed by the Tribunal with the following observation, A) bill of entry is to be filed under section 46 of the customs act and section 46 (5) of the act, provides that the proper officer may permit substitution of bill of entry for home consumption for a bill of entry for warehousing or vice versa if there is no loss of revenue and absence of fraudulent intention. B) Section 68 of the customs act provides for clearance of warehouse goods for home consumption, but the applicant filed the bills of entry for home consumption. When neither the duty was paid, nor any order of our clearance of such goods for home consumption was made by the proper officer. In the meantime, the applicant filed an application for withdrawal of Ex-Bond Bills of Entry and reinstatement of Into Bond Bills of Entry. C) When the importer filed the application for withdra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ain file bill of entry under Section 68(a) of read with section 46 of the Customs Act, for removal of the impugned goods from warehouse which will create a situation where there would be duplicate or two sets of bills of entry for release of goods which is neither statutory nor technically possible. It is their specific case that just after 6 days from the date of importer's application for cancellation of the said bills of entry, the rate of basic custom duty was reduced from 2.5% to NIL and AIDC was reduced from 20% to 7.5%, therefore, if new bills of entry for home consumption is filed that will be under reduced rate of BCD and AICD and accordingly, it would incur huge revenue loss of Rs. 22.25 Crores approximately and hence the request of the importer cannot be permitted in terms of 46(5) of Customs Act. 10. It is submitted the importer's application for substitution or withdrawal of bill of entry actually relates to the application related to bill of entry note on importation, but bills of entry, which is filed after importation at the stage of release from warehouse for home consumption, which is already self-assessed without a reassessment is final in the eye of law. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pretation sought to be given by the revenue would in effect subtract the expression vice versa. It is argued that the revenue is trying to persuade this court to interpret section 46(5) in a manner which would result in judicial legislation, both the conditions enumerated under section 46(5) to be satisfied if the request for substitution is to be allowed. In the present case, both the conditions are satisfied and therefore denial of the request for substitution was illegal. Furthermore Section 46(5) is a trade facilitation measure, and the request for substitution can only be rejected in the event the above mentioned two conditions are not satisfied. 15. It is strenuously argued by the Learned Senior Counsel that even if it is assumed that the conditions provided in section 46(5) is disjunctive or standalone in nature the reasoning given in the Order-in-Appeal that the substitution would cause loss of revenue is of no substance as there was no change of the rate of duty on the date when the application for substitution was made by the respondent. That part the revenue never made any case or made any ground that there was any fraudulent intention at the time of making application ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....equest for withdrawal/cancellation of Ex-bond Bill of entry and reinstatement of Into-bond Bill of Entry cannot be considered under section 46(5) of the Customs Act, 1962. (c) The Learned Tribunal failed to consider that, there is no specific provision in Customs Act, 1962, for permitting the withdrawal / cancellation of Bills of Entry for home consumption, filed for clearance under section 68 of the Customs Act, except in case where the importer wants to relinquish his title to the goods. Sub proviso to Section 68 of the Customs Act, 1962 states that the owner of any warehoused goods may, at any time before an order for clearance of goods for home consumption has been made, relinquish his title to the goods upon payment of penalties, etc. and upon such relinquishment, he shall not be liable to pay duty. In the instant case, the Bills of Entry for home consumption shall be cancelled only after relinquishment. However, in the present case, the importer is not relinquishing the title of goods, therefore, cancellation of Ex-bond bills of entry cannot be permitted under law. (d) The Learned Tribunal failed to consider that, in terms of section 68(b) of the Customs Act, once the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion dated October 27, 2021 and December 4, 2021, were set aside by the Hon'ble Division Bench of this court, by order dated January 11, 2022 and directed to release the goods on payment of 50% of duty in cash and balance 50% by way of bank guarantee subject to the satisfaction of the adjudicating authority. 19. Therefore, it is clear that the reason assigned by the revenue for not considering the request by the importer dated October 2021 was not considered by this Court. It is further apparent from the record that the importer in compliance with such order of this Court approached the concerned Appraising group with a demand draft for a sum of Rs. 23.9. crores and bank guarantee, for an equivalent amount along with applicable interest of Rs. 52.38 lakhs for a period up to January 17, 2022 in compliance with Section 61(2) of the Custom Act. This prayer of the importer for cancellation of Ex-bond Bill of Entry was reflected by order dated January 21, 2022 holding that if the same is to be considered it would cause loss of revenue of Rs. 22.25. crores. The Hon'ble Division Bench of this Court by its order dated March 1, 2022, after setting aside the order dated January 21, 2022 dire....
X X X X Extracts X X X X
X X X X Extracts X X X X
....learance for home consumption. Admittedly, the appellant had done its part of legal duty by presenting bills of entry and complying with section 68(a) of the act on 28-1-1988. But the Customs Officer refused to release the goods on an erroneous assumption that the applicant was liable to pay redemption fine, and since it had not paid the amount, the goods were not liable to be released. The High Court held that the imposition of redemption fine was non-est and the petitioner was within its right to claim release of goods without paying any redemption fine, on the day, it complied with the formalities under section 68 of the act. Section 68.(c) of the act, prescribes an official function which was not performed by the custom authorities due to entertainment of a wrong and illegal notion regarding the payment of redemption fine which resulted into a wrong order by the department. In the circumstances, the department cannot be allowed to take advantage of its own wrongful and illegal act. In moulding relief, this court has always applied principles of equity in order to do complete justice between the parties'. The facts of this case speaks of otherwise as the importer did not discha....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... accept the contentions of the applicant and observed that on the basis of conscious decision taken by the applicant the conversion was allowed and the converted bills of entry was assessed to duty so it was obligatory on the part of the applicant to clear the duties. 23. In the case on hand the Tribunal observed that provision of section 47(2) is not applicable in this case as after filing the Ex-bond bill of entry on 21.9.21 & 28.9.21 the condition of section 68 of the Act were not satisfied and as no assessment was done for clearance of goods in question, therefore the application dated 8.10.21 is required to be disposed off. 24. It was further observed that on 8.10.2021 there was no change in the rate of duty and if the said application filed by the importer would have been considered and disposed of on the same date, the importer in that event was entitled for withdrawal /cancellation of Ex-Bond Bill of Entry and reinstatement of Into Bond Bills of Entry. This observation of the Tribunal does not lay down the correct principal as in terms of section 68(b) and section 17 and 18 of the Act, once the self-assessment was made and no objection is raised by the Authority against t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3, 1986. The duty was therefore payable on the basis of the rates in force on October 23, 1986". This observation certainly goes in favour of the revenue. 27. The learned Senior Advocate on behalf of the Importer submitted that the contentions of the Revenue are not tenable as the request for substitution was made because of less production and dispatches on account of festive seasons as was supported with the certificate from the chartered accountant. Fact remains the certificate of Chartered Accountant was submitted after the prayer was turned down on the ground of inadequate document on 8.10.21. The further argument that section 46(5) allows the substitution of bill of Entry for home consumption with bill of Entry for warehousing and vice versa subject to the condition specified therein and had the request was allowed for substitution on the date of presentation of subsequent bill of entry for home consumption for clearance would have been relevant. However this argument found not to have been any basis as in terms of Section 68(b) and section 17 and 18 of the Act, once the self-assessment was made and no objection is raised by the authority against the self-assessment, the as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lf of the respondent is with regard to the interpretation of Section 46(5) of the Act. It is submitted that the contention of the revenue that the provisions of Section 46(1) is limited to bill of entry for home consumption is incorrect as the provisions encompasses in itself bill of entry for warehousing. Further Section 46(5) allows substitution of a bill of entry for home consumption with a bill of entry for warehousing and vice-versa provided the following two conditions are met namely (a) the interest of revenue are prejudicial or prejudicially affected and (b) there was no fraudulent intention. Therefore it is submitted that both conditions enumerated under Section 46(5) are to be satisfied if the request for substitution is to be looked and in the case on hand both conditions are satisfied and therefore denial of the request for substitution was wholly illegal. It is further contended that Section 46(5) is a trade felicitation measure and request for substitution can only be rejected in the event the twin conditions are not satisfied. Thus, the interpretation would revolve upon usage of the expression "and" in Section 46(5) of the Act. The said provision states that if the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....difying is less favourable to the subject provided that the intension of the legislature is otherwise quite clear. 39. In Punjab Produce and Trading Company Limited Versus Commissioner of Income Tax, West Bengal II, Calcutta (1971) 2 SCC 540 it was held that a distinction may be made between positive and negative condition prescribed by a statute for acquiring a right or benefit. Positive conditions separated by "or" are read in the alternative but negative conditions connected by "or" are construed cumulative and "or" is read as "nor" or "and". 40. In Ishwar Singh Bindra Versus State of Uttar Pradesh AIR 1968 SC 1450 the Hon'ble Supreme Court held the word "and" as generally a cumulative sense requiring fulfilment of all the conditions that it joins together, and herein it is the antithesis of "or". Sometimes, however, even in such a connection, it is, by force of context read as "or". In Raghunath International Limited Versus Union of India 2012 (280) ELT 321 (All), it was held that it is a well established principle of statutory interpretation that the word "or" is normally disjunctive and the word "and" is normally conjunctive. Both of them could be read as vice- versa but th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....legislature and indicate the scope and the purpose of the legislation itself. 43. Justice G.P. Singh in Principles of Statutory Interpretation, XII Edition, has observed that a statute must be read as a whole as words are to be understood in their context. Extension of this rule of context permits reference to other statutes in Pari Materia i.e. statutes dealing with the same subject matter or forming part of the same system. This principle was applied by the Hon'ble Supreme Court in R.S. Raghunath Versus State of Karnataka (1992) 1 SCC 335 wherein the Hon'ble Supreme Court held that the court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statutes; it must compare the clause with other parts of law and setting in which the clause to be interpreted occurs. 44. It is settled legal principle that there can be no universal rule laid down as to whether enactments shall be considered directory only or obligatory with implied nullification for disobedience. It is the duty of the court to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute. (re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onditions namely interest of revenue is not prejudicially affected and there should be no fraudulent intention should be disjunctive and not conjunctive. This interpretation alone would be in consonance with the scheme of the Customs Act. Therefore, the contention of the respondent/importer that both conditions have to be simultaneously satisfied does not merit acceptance. That apart, the power under Sub-Section (5) of Section 46 provides for the proper officer upon his satisfaction, that either of the two conditions are satisfied he may permit the substitution of a bill of entry for home consumption for a bill of entry for warehousing or vice-versa. The expression "may" used does not make the provisions mandatory because the expression "may" has to be read along with the satisfaction which has to be recorded by the proper officer. Therefore, the statutory provision provides sufficient "play in the joints" by giving enough discretion to the proper officer to permit substitution or not. An alternate submission was made by the Learned Senior Advocate appearing for the respondent that even assuming the conditions provided in Section 46(5) are disjunctive or stand-alone the reasoning g....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 21.09.2021 and 28.09.2021, the respondent filed 10 bills of entries for home consumption in connection with the 7 bill of entries for warehousing on the EDI Portal intending to clear the goods for home consumption. This bill of entry was based on a self-assessment made by importer. The department did not raise any objection regarding self-assessment or the rate of duty payable on the imported goods. If such be the fact situation in terms of clause (a) of Section 47 (2) the importer has to pay the import duty on the date of presentation of the bill of entry. Thus, the bill of entry for home consumption based upon self-assessment having not been questioned by the department is deemed to have been assessed and finality has been arrived at. In such circumstances merely because interest is not payable in terms of Section 61 (2) of the Act cannot advance the case of the respondent/importer. If the importer is statutorily bound to pay the duty on the date of presentation of the bill of entry in the case of bills of entry which are self-assessed and the respondent importer having failed to do so, cannot seek for cancellation of the said bill of entry that to by way of a letter dated 08.1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y alterations and therefore the assessment has been completed as of 21.09.2021 and 28.09.2021 under such circumstances question of reopening the same would not arise. 53. Section 15 of the Act deals with date for determination of rate of duty and tariff valuation of the imported goods. Sub-Section (1) of Section 15 states that the rate of duty and tariff valuation if any, applicable to any imported goods shall be the rate and valuation in force mentioned in Clauses (a) (b) and (c). For the case on hand clause (b) will apply which states that in case of goods cleared from warehouse under Section 68, the rate of duty shall be the rate and valuation in force on the date on which the bill of entry for home consumption in respect of such goods is presented under that Section. In this regard, the decision of the Hon'ble Supreme Court in M/s. Shah Devchand and Company Versus Union of India and Others AIR 1991 SC 1931 is to be taken into consideration. Therefore, the relevant date for computing the date of customs duty in the case on hand is on the date when the respondent importer filed the bill of entry for home consumption i.e. on 21.09.2021/28.09.2021 as the assessment is complete and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....actually distinguishable because request for substitution was made after a period of two and a half years. In our view, we are required to look into the legal principle which was laid down in the said decision namely that conversion was permitted under the converted bill of entry was on duty and upon such assessment, it became obligatory on the part of the applicant therein to clear the goods within a specified time and this having not been done the order of the assessing officer rejecting the re-conversion under Section 46 (5) was approved. Therefore, the decision would support the stand taken by the revenue before us. 55. The decision in Bharat Commerce and Industries Limited Versus Collector of Customs, Bombay (1997) 93 ELT 653 (SC) considered as to whether a letter could be treated as bill of entry for warehousing and it was held that Sub-Section (1) of Section 46 requires presentation of the proper officer of a bill of entry for home consumption or warehousing in the prescribed form. Sub-Section (2) lays down that the bills of entry shall include all the goods mentioned in the bill of lading or other receipts given by the carrier to the consignor. Sub-Section (4) of Section 4....