ANTARCTICA LIMITED Vs. UNION OF INDIA (UOI)

JUDGEMENT

(1.) Challenging the judgment and order dated 8th May, 2002 passed in the Writ Petition No. 441 of 2002, this appeal has been preferred by the writ Petitioner. By the impugned judgment under appeal, writ application was dismissed on the ground of res judicata, in view of the fact that very notice dated 16th March, 2001 being Annexure P -12 of the writ application, which was under challenge in the writ application, was the subject matter of challenge in the earlier writ application being writ Petition No. 613 of 2001, which stood disposed of with certain direction. In the writ application the Petitioner prayed for quashing of the instruction dated 16th March, 2001 being an instruction in pursuance of a notice issued under Sec. 142of the Customs Act, 1962 read with Sec. 11 of the Central Excise Act, 1944, directing that any goods belonging to the writ Petitioner as would pass through the Customs House may be sold under provision of Sec. 150 of the Customs Act, 1962 read with Sec. 11 of the Central Excise Act, 1944 and the amount stated in the demand should be deducted from the sale proceeds. So far as the other relief in the writ praying injunction order restraining recovery of the amount of duty or interest in terms of the demand notice dated 15th June, 1998, learned trial Judge discussed at length about filing of the several writ petitions earlier, the factum of preference of appeal without pre -deposit of the demand and different orders of the High Court, allowing the writ Petitioner to deposit 25 per cent of the demand as a condition precedent of maintainability of the appeal etc. and thereby rejected the prayer. Impugned judgment under appeal reads such:

(2.) From the impugned judgment under appeal it appears that the case has a checkered history. The writ Petitioner -appellant was accorded sanction as importer to carry on manufacturing process or other operations in the warehouse under Regulation 5 of the Manufacture and Other Operations in Warehouse Regulation, 1966 by Assistant Collector of Customs for Falta Export Processing Zone. The manufacturing process or other operations permitted to be carried on in the warehouse were prints and packaging materials. The types and nature of import and other goods permitted to be used was capital goods and raw materials. The condition imposed in the sanction order to carry on manufacturing process and other operations in terms of the said Regulation, wherein under Clause (4) it was stipulated "before warehousing and manufacturing any goods the bonder will have to furnish required insurance policies in the name of the Collector of Customs, equal to the amount of duty inclusive value". It was further stipulated that such manufacture should be subject to provision of Customs Act, 1962, the said Regulation and also in terms of the conditions of the Customs Act, 1962. A bond was executed in between the said importer -writ Petitioner and M/s. Prudential Plus Surety by binding themselves and their heirs, successors, executors and/or administrators accepting a liability to pay Rs. 10 crores to the President of India on the conditions stipulated thereto. The relevant portion of the bond reads such:

(3.) On breach of the conditions of sanction to import capital goods, the Petitioner wrongfully mortgaged the property, namely, those capital goods, raw materials, machinery and other finished goods including the plant and machinery in favour of different financial institutions and banks. Such import of capital goods and raw materials was exempted from any custom duty and excise duty. While the goods were in warehouse, due to alleged electrical short -circuit at midnight of 11th January, 1996, the unit suffered a devastating fire. The writ Petitioner -appellant got the compensation from M/s. National Insurance Company Limited, the insurer and the amount was paid to the financial institutions where -from the writ Petitioner -appellant took loan under the agreement. On 15th June, 1998, a demand notice under Sec. 28(3)(ii) read with Sec. 72(d) of the Customs Act, 1962 and Sec. 11A(3)(ii)(b) of the Central Excise Act, 1944 amounting to Rs. 63886466/ - being duty not levied together with interest at the rate of 18 per cent from 12th January, 1996 till the date of payment of the duty was served to the Petitioner. Petitioner submitted his representation against this notice. In the demand notice, the authority alleged that Petitioner received insurance claim for the insured value of the capital goods, raw materials etc. Petitioner took several grounds to assail this notice including limitation prescribed under Sec. 28 of the Customs Act, 1962, as also under Sec. 11A of the Central Excise Act, 1944. The said demand notice stood confirmed by the order dated 18th December, 1988.