DESIGNCO Vs. UNION OF INDIA

JUDGEMENT

(1.) A. FACTUAL BACKGROUND : This batch of writ petitions assail the action initiated by the respondents seeking to deprive the benefits claimed and derived by the writ petitioners under the Merchandise Exports from India Scheme [MEIS]. The dispute itself emanates from the export of what the petitioners contend to be handcrafted articles of stone during the period in question and entitled to benefits under the MEIS by virtue of being classifiable under Harmonised System of Nomenclature [HSN] Code 681599. The dispute appears to have arisen in the backdrop of a letter issued by the Central Board of Indirect Taxes and Customs [CBIC] dtd. 31/5/2019 alluding to a discrepancy in the HSN Code liable to be ascribed to stone and marble handicraft products. Based on a reading of that communication of the CBIC, the respondent No. 6, the Commissioner of Customs, appears to have issued a Public Notice No. 57/2019 in terms of which it was apprised to all that stone and marble handicraft products are liable to be classified under Custom Tariff Heading [CTH] 6802, subject to compliance being affected with the other conditions comprised in the various Explanatory Notes attached to that heading. It was on a purported reading of the aforesaid communications and the portend of the view taken by the CBIC that action appears to have been initiated against the petitioners. The principal allegation appears to be that the petitioners had illegally obtained benefits under the MEIS and were, therefore, liable to refund the amount of benefit claimed under that scheme. It is this action which also led to the issuance of various summons under Sec. 108 of the Customs Act, 1962 [Customs Act] which are impugned before us.

(2.) In order to render a context to the issues that arise for our consideration we, for the sake of brevity, propose to take note of the facts as they obtain in W.P. (C) No. 17328 of 2022 and which was designated as the lead writ petition.

(3.) The petitioner, M/s Sharma International, claims to be a reputed exporter from Agra engaged in the export of handicraft articles made of marble and other material. It avers that it had been exporting those articles since 1991 treating them as classifiable under Indian Trade Classification (Harmonised System) [ITC (HS)] 68159990, including during the operation of the MEIS scheme, which held the field between 2015 upto 2020. The products themselves are described to be handcrafted articles of stone popularly known as 'Chakla Belan' (Rolling Board and Rolling Pin), mortar and pestle and other allied articles. According to the writ petitioner, those products are prepared by combining marble and stone with steel, wood, glass and the composite material being thereafter bound together with the use of adhesives.