GRANT INVESTRADE LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) By this petition under Article 226 of the Constitution of India, the petitioners seek a declaration that no Customs Duty is payable on the licence fee paid to the overseas licensor in connection with import of set-top boxes and that the petitioners have been rightly paying service tax on the said licence fee. The petitioners also seek writ of mandamus or any other appropriate writ or orders directing the respondents not to demand Customs Duty on the licence fee paid in connection with import of set-top boxes, except by following the due process of law. The writ petition has been amended and prayer clauses (c-1) to (c-3) read as under :-

(2.) It is the case of the petitioners that it is engaged in the business of providing the multi-channel downlinking (reception), distribution and transmission technology. It is the licenced Headend in the Sky (HITS) operator. Above technology enables all pay channels to be received at the central facility and uploaded by the operators to its satellite after encryption of the channels. The petitioners have obtained several licences and permission as more particularly enlisted in para 1 of the petition. The petitioners state that the infrastructure was installed and it connects the set-top boxes. The petitioners provide the details of all such steps and then contend that the Union of India through the Directorate of Revenue Intelligence has caused an investigation to be made into certain importations. The petitioners have stated that the said set-top boxes are required to meet certain standards, which have been now evolved and made applicable by the Union of India in terms of its policies. The petitioners had an agreement and for importing the set-top boxes from various vendors. The petitioners in para 12 have pointed out as to how the imported set-top boxes are stored in a bonded warehouse and cleared for home consumption.

(3.) The petitioners then state that the service tax on the activation/licence fee has been paid and thereafter the petitioners obtained another agreement for transfer of licence acquired by Induslnd Media and Communications Limited ("IMCL"). Thereafter the petitioners entered into an agreement for providing incorporated CAC security system for its development in India to comply with the guidelines issued by the Ministry of Telecommunications. The petitioners also place reliance on certain clauses of this agreement. The petitioners in paragraph 18 of the writ petition point out as to how they are paying applicable Customs Duty on the physical import of the set-top boxes under the relevant chapter headings of the First Schedule to the Customs Tariff Act, 1975, respectively. The petitioners have also been duly discharged from Service Tax liability under reverse charge mechanism, in terms of the Finance Act, 1994, as amended. The petitioners state that at no point of time and earlier to March, 2016, any objection has been raised by the respondents.