SELECT IMPEX LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition assails the Order dated November 25, 2004 of the Additional Director General of Foreign Trade holding that the Petitioner was not entitled to DEPB Credit in respect of the export of a consignment of Quartz wrist watches with gold bracelets. The Petitioner had earlier approached this Court by way of a Writ Petition bearing No. 392 of 2003 which was disposed of on August 29, 2004 remanding the matter for fresh consideration on merits. While doing so the Petitioner's contention had been noted to the effect that the question is on all fours with that of J.G. Exports vs. Commissioner of Customs, New Delhi 2000 (121) E.L.T. 754 which has been affirmed in Appeal to the Supreme Court, reported as Commissioner of Customs, Air Cargo, New Delhi vs. J.G. Exports, 2003 (154) E.L.T. 353(S.C). It reads as follows: Civil Appeal Nos.2636-2639/2001 are filed against the judgment and order dated 6th September, 2000 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal Nos. C/409- 411/99A and C/20/2000A and Civil Appeal Nos. 3403- 3407/2001 are filed against the judgment and order dated 24th October, 2000 in Appeal Nos. C/434, 435. 437. 438, 439/1998 whereby the Tribunal after appreciating the facts arrived at the conclusion that for the goods which were sought to be exported there was no over-valuation by the assessee concerned and, therefore, the goods were not liable to confiscation. Hence the order passed by the Tribunal does not call for any interference. With regard to the other issues decided by the Tribunal, in our view, they are not required to be dealt with in these appeals and are left undecided. These appeals are dismissed accordingly. There shall be no order as costs. 2. I.A. Nos. 11-14/2003 would not survive and stand disposed of, accordingly. Indubitably, the Apex Court gave its imprimatur only to the decision pertaining the confiscation of the goods on the grounds of over-valuation. Nothing more can be extracted from the dismissal of the Special Leave Petition filed by the Customs Department.

(2.) The Additional Director General of Foreign Trade in its detailed order has opined that the question which had arisen in those proceedings were altogether different. Unfortunately, it has incorrectly been observed that CEGAT is not competent to decide upon the Import and Export Policy. DGFT is the final authority on interpretation of Import and Export Policy. .... None of the DGFT offices/officers are impleaded in the CEGAT and therefore CEGAT would not be enlightened on the nuances of DEPB Scheme; fixation of DPB rates, administering the scheme etc. It does not behove a high functionary such as the Additional Director General of Foreign Trade to make these statements which may tantamount to Contempt of Court. One of the Departments of the Government was given a detailed hearing by CEGAT and it was always open to it to seek impleadment of the DGFT. It is true that Appeals against the Order of the DGFT do not lie to the CEGAT. However, it is quasi judicial authority deserving and commanding the respect of the Executive. I shall say no more.

(3.) So far as the applicability of the J.G. Exports dictum is concerned there appears to be force and merit in the view taken in the impugned order. Mr. Mukul Rohtagi, learned Senior counsel appearing on behalf of Petitioner, has relied on Section 113(d) of the Customs Act, 1962 as a foundation of the argument that the actions of the Customs Authority need not be circumscribed by the Customs Act alone and confiscation of goods admitted to be improperly exported can also be predicted on the infraction of any other law for the time being in force. It is, therefore, an idle argument that the Directorate of Foreign Trade is not at all concerned with the actions of the Customs Department. The conundrum that has directly arisen in this petition also directly arose in J. G. Exports. In J.G. Exports a Redemption fine of Rs. 30 lakhs in lieu of confiscation had been imposed on the export of 215 Quartz Analog Watches, in addition to personal penalties on the partners of the firm to the extent of Rs. 20 lakhs each. It is also true that the question of valuation for purposes of availing high DEPB benefit of the consignment of goods which had been confiscated by the Customs Department had arisen in the earlier case. It had also been argued by the Department that the goods were not of the kind generally traded/exported and, therefore, could not be covered under the DEPB Scheme. The larger Bench of the CEGAT, comprising 3 Learned Members drawn from different disciplines/experience, had paraphrased one of the arguments put forward on behalf of the Petitioners in the following manner - (ii) General instruction No.4 under Appendix-28A to the Hand Book of Procedure [Volume 1] pertaining to Exim Policy 1997-2002, relied on by the Department to deny DEPB benefit to the wrist watches in question, was incorporated in Appendix 28A only w.e.f. 1-4-1999 and was not in force at the time of filing of the shipping bill; Quartz analog watches very much figured at Sl. No. 37 under Product Group Code 83 in the table of DEPB credit rates for the relevant period and, therefore, were eligible for DEPB benefit at the rate of 21% of the FOB value. The CEGAT held that the goods in question, i.e. Quartz Analog Watches with integrated bracelet were required to be assessed FOB value as a single unit. It also held that the Department 's allegation that the gold bracelets were attached to ordinary watches for the purpose of over-valuation with intent to claim higher DEPB credit has no legal basis. These findings are directly binding on the Customs Department and would indirectly be binding on every other Department of the Government. The observations and approach of the Additional Director General of Foreign Trade in respect of the CEGAT can only be taken in very poor light.