Case Note & Summary
The petitioner, M/s A.V. Industries, a partnership firm registered under the Indian Partnership Act, is a fully export-oriented unit manufacturing automobile rubber parts for export. It was granted advance licences under the Duty Exemption Entitlement Certificate (DEEC) scheme, allowing duty-free import of raw materials for export production. The Import Policy (AM 1988-91) was changed from time to time. The respondents issued a letter dated 13/16th September, 1993 clarifying that as per the sensitive list at Sr.No.2, import of rubber chemicals was restricted to 7% of FOB value of exports, and accordingly the value of the petitioner's licence was restricted. A show cause notice dated 18th October, 1993 was issued calling upon the petitioner to show cause why a demand of Rs. 13,46,096/- for short levy should not be confirmed and recovered under the Customs Act, 1962. The petitioner challenged both the letter and the show cause notice. The court dismissed the petition, upholding the validity of the import policy restriction and the show cause notice.
Headnote
A) Customs Law - Import Policy - DEEC Scheme - Restriction on Import Value - The petitioner, a fully export-oriented unit, was granted advance licences under the DEEC scheme. The respondents issued a letter restricting the CIF value of import of rubber chemicals to 7% of FOB value of exports and a show cause notice for short levy of Rs. 13,46,096/-. The court upheld the restriction and the notice, holding that the import policy was valid and the notice was maintainable. (Paras 1-5)
Issue of Consideration
Whether the letter dated 13/16th September, 1993 restricting the CIF value of import of rubber chemicals to 7% of FOB value of exports and the show cause notice dated 18th October, 1993 for recovery of short levy of Rs. 13,46,096/- under the Customs Act, 1962 are valid.
Final Decision
The petition is dismissed. The letter dated 13/16th September, 1993 and the show cause notice dated 18th October, 1993 are upheld.
Law Points
- Import Policy
- DEEC Scheme
- Advance Licence
- Restriction on Import Value
- Show Cause Notice
- Customs Act
- 1962
- Short Levy
- Recovery of Duty
Case Details
2005 LawText (BOM) (05) 233
Writ Petition No.1023 of 1994
Mr.S.N. Kantawala i/b M/s.Kantawala & Co. for the petitioner; Mr.S.M. Shah with Mr.H.V. Mehta for the respondents
Union of India, The Joint Director General of Foreign Trade, The Assistant Collector of Customs
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Nature of Litigation
Writ petition challenging a letter restricting import licence value and a show cause notice for recovery of short levy under the Customs Act, 1962.
Remedy Sought
Quashing of the letter dated 13/16th September, 1993 and show cause notice dated 18th October, 1993.
Filing Reason
The petitioner claimed that the restriction on import value and the demand for short levy were illegal and arbitrary.
Issues
Whether the letter dated 13/16th September, 1993 restricting the CIF value of import of rubber chemicals to 7% of FOB value of exports is valid.
Whether the show cause notice dated 18th October, 1993 for recovery of short levy of Rs. 13,46,096/- under the Customs Act, 1962 is maintainable.
Submissions/Arguments
The petitioner argued that the restriction on import value was arbitrary and contrary to the DEEC scheme.
The respondents contended that the import policy was valid and the show cause notice was justified.
Ratio Decidendi
The import policy restricting the CIF value of rubber chemicals to 7% of FOB value of exports was valid and the show cause notice for short levy was maintainable under the Customs Act, 1962.
Judgment Excerpts
This petition is challenging the letter dated 13/16th September, 1993 at Exhibit 'H'; whereby it was clarified that as per the sensitive List at Sr.No.2 Import of Rubber Chemicals CIF value had been restricted upto 7% of FOB value of Exports.
The petitioner is also challenging the show cause notice dated 18th October, 1993 at Exhibit 'G'; whereby the petitioners were called upon to show cause as to why the demand set up against them for short levy to the extent of 13,46,096/- should not be confirmed and why action for recovery thereof should not be initiated under the provisions of the Customs Act, 1962.
Procedural History
The petitioner filed Writ Petition No.1023 of 1994 in the High Court of Judicature at Bombay challenging the letter dated 13/16th September, 1993 and show cause notice dated 18th October, 1993. The petition was heard by a Division Bench comprising V.C. Daga and J.P. Devadhar, JJ., and dismissed on 4th May, 2005.
Acts & Sections
- Customs Act, 1962:
- Indian Partnership Act:
