Case Note & Summary
The petitioner, E. I. DuPont India Pvt. Ltd., filed a writ petition under Article 226 of the Constitution of India against the action of Respondent Nos.2 to 5 in loading 1% Extra Duty Deposit (EDD) on imports made by the petitioner or their purchasers, and against the action of Respondent Nos.4 and 5 in withholding out of charge orders unless 1% EDD was paid under Bills of Entry No.593135601 dated 26th June 2014 and Bill of Entry No.5626428 dated 27th May 2014. The petitioner contended that despite the Special Valuation Branch (SVB) order dated 23rd June 2014 being brought to the notice of Respondent No.3, and despite the conditions of Circular No.11/2001-Cus dated 23rd February 2001 that 1% EDD cannot be recovered once the SVB decision is given or where no SVB order is passed after four months from the date of filing of the reply to the questionnaire, the respondents continued to demand EDD. The court found the demand arbitrary and contrary to the circular and the judgment in M/s. Skoda Auto India Pvt Ltd v. Union of India, 2010 (255) ELT 63 (Bom). The court allowed the petition, quashing the demand for EDD and directing the respondents to release the goods without insisting on payment of 1% EDD.
Headnote
A) Customs Law - Extra Duty Deposit - SVB Order - Circular 11/2001-Cus - The petitioner challenged the demand of 1% EDD on imports despite an SVB order dated 23rd June 2014 and the circular providing that EDD cannot be recovered once SVB decision is given or after four months from filing reply to questionnaire. The court held that the demand was arbitrary and contrary to the circular and the judgment in M/s. Skoda Auto India Pvt Ltd v. Union of India. (Paras 1-3)
Issue of Consideration
Whether the respondents could demand 1% Extra Duty Deposit (EDD) on imports despite the SVB order dated 23rd June 2014 and the conditions of Circular No.11/2001-Cus dated 23rd February 2001.
Final Decision
The court allowed the petition, quashing the demand for 1% EDD and directing the respondents to release the goods without insisting on payment of 1% EDD.
Law Points
- Extra Duty Deposit (EDD) cannot be recovered once Special Valuation Branch (SVB) order is passed
- or after four months from filing reply to questionnaire if no SVB order
- Circular 11/2001-Cus dated 23rd February 2001
- Article 226 of Constitution of India
Case Details
2014 LawText (BOM) (08) 34
Writ Petition No. 6364 of 2014
S.C. Dharmadhikari, B.P. Colabawalla
Mr. Bharat Raichandani i/b Mr. Mihir P. Deshmukh for the Petitioner, Mr. P. S. Jetly for the Respondent (UOI)
E. I. DuPont India Pvt. Ltd.
The Union of India (Through the Secretary) Ministry of Finance
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Nature of Litigation
Writ Petition under Article 226 of the Constitution of India challenging the demand of 1% Extra Duty Deposit (EDD) on imports.
Remedy Sought
The petitioner sought quashing of the demand for 1% EDD and direction to release goods without insisting on payment of EDD.
Filing Reason
The respondents demanded 1% EDD on imports despite an SVB order dated 23rd June 2014 and contrary to Circular No.11/2001-Cus.
Issues
Whether the respondents could demand 1% Extra Duty Deposit (EDD) on imports despite the SVB order dated 23rd June 2014 and the conditions of Circular No.11/2001-Cus dated 23rd February 2001.
Submissions/Arguments
The petitioner submitted that charging of 1% EDD despite the SVB order dated 23rd June 2014 and the conditions of Circular No.11/2001-Cus that EDD cannot be recovered once SVB decision is given or after four months from filing reply to questionnaire, is arbitrary and contrary to the circular and the judgment in M/s. Skoda Auto India Pvt Ltd v. Union of India.
Ratio Decidendi
Extra Duty Deposit (EDD) cannot be recovered once the Special Valuation Branch (SVB) order is passed, or where no SVB order is passed, after four months from the date of filing of the reply to the questionnaire, as per Circular No.11/2001-Cus dated 23rd February 2001.
Judgment Excerpts
The grievance made by the Petitioner in this Writ Petition under Article 226 of the Constitution of India is against the action of Respondent Nos.2 to 5 in loading 1% Extra Duty Deposit (“EDD”) on the imports made by the Petitioner and/or their purchasers, and against the action of Respondent Nos.4 and 5 to withhold out of charge order unless 1% of EDD is paid under Bills of Entry No.593135601 dated 26th June 2014 and Bill of Entry No.5626428 dated 27th May 2014.
The learned counsel appearing on behalf of the Petitioner submitted that charging of 1% of EDD by Respondent Nos.4 and 5 despite the SVB order dated 23rd June 2014 being brought to the notice of Respondent No.3 along with the conditions of the Circular No.11/2001-Cus dated 23rd February 2001 that 1% EDD cannot be recovered once the decision is given by the Special Valuation Branch (“SVB”), or where no SVB order is passed there on the expiration of four months from the date of filing of the reply to the questionnaire, is arbitrary and contrary to the said circular as well as the judgment of this Court in the case of M/s.Skoda Auto India Pvt Ltd v/s Union of India reported in 2010 (255) ELT 63 (Bom).
Procedural History
The petitioner filed a writ petition under Article 226 of the Constitution of India challenging the demand of 1% Extra Duty Deposit (EDD) on imports. The petition was reserved on 17th July 2014 and pronounced on 4th August 2014.
Acts & Sections
- Constitution of India: Article 226
