DHARMANANDAN DIAMONDS (P.) LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) HEARD learned counsel for the parties for final disposal of the petition. Though the petitioner has made several prayers in the petition, only the prayer for releasing the seized goods is pressed before us.

(2.) BRIEFLY stated, the facts are that the petitioner is a company engaged in diamond cutting and polishing work. For the purpose of its manufacturing activities, the petitioner imported certain machineries. Such machineries would require sophisticated software for operation. The issue pertains to duty liability on such imported software. It is not in dispute that in respect of about 74 such items, DGCEI is inquiring into whether such imports attracted service tax. Majority of these imports were made in the year 2007 and shortly thereafter. The petitioner actually put the goods to use and continued its manufacturing activity from its unit at Surat. At that stage, the Customs department initiated investigation regarding the customs duty liability on such imported software. These investigations are pertaining to 37 imports which are part of the 74 instances under the scanner of DGCEI. The Customs authorities prima facie believed that the petitioner did not include the price of the software in the machineries imported and thereby paid customs duty only on the machineries evading customs duty payable on the software. At that stage, the petitioner filed this petition. Initially the goods were seized. Under a supratnama dated 17.1.2014, the goods were returned to the petitioner for safe keeping. One of the conditions was that the goods are being returned only for safe custody with instructions not to remove, sell or part with the same without prayer permission of the competent authority. During the pendency of this petition, the authorities also passed orders of provisional release of the goods. By an order dated 5.3.2014, the Deputy Commissioner of Customs, Mumbai ordered release of the goods on following conditions:

(3.) IN the present petition, out of the several prayers made in the petition, we are examining the limited prayer whether on certain conditions the petitioner can be permitted to use the software for its manufacturing activity since rest of the prayers are not pressed.