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Judgment
In this writ petition the petitioner-M/s. Dhamara Port Company Limited has filed this writ petition with the following prayer :
(i) Issue a writ in the nature of certiorari, quashing the order dated 11.08.2017 of the Ld. Commisioner of Customs, Bhubaneswar.
(ii) Issue an order, directing the Commissioner of Customs, Bhubaneswar to pass an order/public notice under proviso to para 10 of the customs
notification no. 16/2015, dated 01.04.2015, permitting DPCL to clear the imported 3 GTSUs'' through Dhamra Port and the spares under the
EPCG scheme.
(iii) Issue an order, directing opposite party no.3 to extend the validity of EPCG Licences, which remained unutilized due to inaction of Customs
Authorities.
The essence of the contentions made by the petitioner-company through Mr. Asok Mohanty, senior counsel is that the petitioner-company
sought to import three Grab Type Ship Unloaders (GRSU) from Shanghai Zhenhua Heavy Industries Co. Ltd., China for installation at its port
located at the mouth of river Dhamara in the state of Odisha. It is averred that the intent behind import was to provide import facility for import of
lime stone and thermal coal which require deep draught berths, equipped with mechanized handling. The essential sophisticated handling
equipments like ship loaders, unloaders were required for the purpose. Accordingly the petitioner sought for authorization under the Export
Promotion Capital Goods (EPCG) Scheme and the Foreign Trade Policy (FTP) to 2015-20. Necessary certification/authorization for import of
capital goods and spares for port centres were issued in terms of the Foreign Trade Policy (FTP) to 2015-20. The said Export Promotion Capital
Goods (EPCG) Scheme was introduced to facilitate import of capital goods and services in order to enhance the country?s export
competitiveness. Consequently the Export Promotion Capital Goods (EPCG) Scheme allows for import of Capital Goods for pre-production,
production and post production, at zero customs duty. Chapter 5.01(c) of the FTP 2015-20, also stated that Import under EPCG Scheme shall
be subject to an export obligation equivalent to 6 times of duty saved on capital goods, to be fulfilled in six years reckoned from date of issue of
Authorisation.
It is further averred on behalf of the petitioner that the petitioner-company on being authorized to import three Grab Type Ship Unloaders
(GRSU) materials along with spares, placed orders wit Shanghai Zhenhua Heavy Industries Co. Ltd., China for supply of the same. It appears that
the Deputy Director General of Foreign Trade, Cuttack (O.P.No.3) on receipt of application from the petitioner, granted necessary certification on
13.05.2016 for importing the aforesaid items. Petitioner made an application for issue of necessary Export Promotion Capital Goods (EPCG)
Scheme licence on 28.04.2016 and prior thereto had placed orders with the Chinese company for purchase of ships loaders.
The goods in question brought by see vessel for which permission was sought for on 02.05.2016 with the Deputy General of Foreign Trade,
Cuttack under section 30 of the Customs Act by the person incharge of the Vessel. The Assistant Commissioner, Dhamara accepted Import
General Manifest (IGM) on 03.05.2016 and the vessel namely, MV Zhen Hua 8 which arrived at port/anchorage of Dhamra Port on 05.05.2016.
Thereafter basing on the IGM filed by the person incharge of the vessel, vessel berthed at Dhamra Port and unloaded the goods in question and
the three Grab Type Ship Unloaders (GRSU) were unloaded from the vessel after necessary inward entry permissions were obtained from the
customs authorities at Dhamra port. On the date of arrival of the vessel at Dhamra, petitioner had also applied to the Commissioner of Customs,
Bhubaneswar for permission to unload the goods under the EPCG Scheme on the same day i.e. on 09.005.2016 as contemplated under
paragraph-10 of notification No.16/2015 of Central Board of Excise and Customs dated 01.04.2015 which is quoted herein below :
GOVERNMENT OF INDIA,
MINISTY OF FINANCE (DEPARTMENT OF REVENUE)
Notification No.16/2015-Customs
New Delhi, the Ist April, 2015
(G.S.R. 252(E)-In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central
Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in the Table 1 annexed hereto from)
The exemption under the notification shall be subject to the following conditions namely -
(10) that the imports and exports are undertaken through the seaports, airports or through the inland container depots or through the land customs
stations as mentioned in the Table 2 annexed hereto or a Special Economic Zone notified under section 4 of the Special Economic Zones Act,
2005(28 of 2005);
Provided that the Commissioner of Customs may, by special order or a public notice and subject to such conditions as may be specified by him,
permit import and export through any other sea-port, airport, inland container depot or through a land customs station within his jurisdiction.
It appears from the record that the Assistant General of Foreign Trade, Cuttack granted necessary EPCG authorization on 13.05.2016. It
further appears that the IGM required certain amendments for which the agent of the vessel sought for such amendment with the Assistant
Commissioner, Dhamra which is accordingly allowed. At this stage it would also be relevant to note here that in terms of the aforesaid notification,
admittedly the port of Dhamra ported by the petitioner is not a see port which finds mention at table (2) under the said notification. But it would be
relevant to note here that the port of Paradeep has been mentioned in table (2). However, Dhamra port was not notified port in terms of the
handbook of procedures stipulated by the Government of India, Ministry of Commerce and Industry, Department of Commerce. The relevant
portion is quoted herein below :
4.37 Port of Registration
(a) Advance Authorisation shall be issued for purpose of import and export through one of sea ports or airports or ICDs or LCS specified below.
Authorisation holder shall register authorization at the post specified in authorisaction and thereafter all imports against said authorization shall be
made only through that port, unless the authorization holder obtains permission from customs authority concerned to import through any other
specified port. However, exports may be made through any of the specified ports.
(c) For imports from Airport/Seaport/ICD/LCS other than port of registration, a TRA shall be issued by the customs authority at the port of
registration to customs authority at port of import. However, this requirement of TRA shall not be required if the port of registration and port(s) of
imports are EDI enabled and the authorization holder has registered its authorization.
It is submitted that in terms of the aforesaid guidelines issued by the Government of India, petitioner not being a ICD or LCS port, has sought
for registration at Paradeep Port as the port of import for the purpose of issue of the TRA. Accordingly from the records it appears that necessary
application was moved before the Assistant Commissioner, Paradeep Customs seeking issue of TRA on 07.06.2016 and the said permission was
granted by the Assistant Commissioner, Customs Paradeep Port on the same day on 07.06.2016. While the situation stood thus, it appears that
the Commissioner of Customs before whom petitioner had applied for exercise of power under paragraph-10 of notification No.16/2015 of
Central Board of Excise and Customs dated 01.04.2015 ultimately came to be rejected vide the impugned order under Annexure-1. The relevant
portion thereof is quoted herein below :
COMMISSIONERATE OF CUSTOMS
(PREVENTIVE), BHUBABNESWAR, CENTRAL
REVENUE BUILDING, RAJASWA VIHAR,
BHUBANESWAR-751007
C.No. VIII(48)53/CUS(P)/BBSR/2016 Dated 11.08.2017
To
M/s. Dhamra Port Company Limited
At-Dosinga, P.O. Dhamra
District: Bhadrak
Odisha-756171
Sub: Import of Capital Goods under EPCG Scheme in terms of Chapter-5 of the Foreign Trade Policy (2015-20), import of Goods at Zero
Customs Duty at Dhamra Port Company Ltd (DPCL)-Regarding.
DISCUSSION & FINDINGS
I have gone through the records of the following two files-(i) Current importation File No.VIII(48)53/CUS(P)/BBSR/2016 and (ii) Earlier
importation File No.VIII(43)I/Cus/BI/ 2007. On perusal of the documents, correspondences and note-sheets of the file number VIII (48)
53/CUS(P)/BBSR/2016, I find that the Commissioner of Customs (Preventive) made reference to Board twice, on 05.01.2017 and 27.03.2017,
to clarify as to whether he can by a Special Order/Public Notice declare Dhamra Port as notified port retrospectively in terms of proviso to Para
10 of Notification 16/2015-Cus dated 01.04.2015. The Board did not clarify the issue in as many words and instead directed the Commissioner
to pass a reasoned order after giving opportunity of Personal Hearing following Principles of Natural Justice to the importer. Accordingly Personal
Hearing was given on 08.05.2017. But due to change of adjudicating authority, another Personal Hearing was given on 31.05.2017.
In terms of the aforesaid proviso to Para 10 of Notification 16/2015-Cus dated 01.04.2015, the Commissioner can issue Public Notice
(PN)/Special Order declaring any port, other than those listed in the Notification, as eligible Port for EPCG Scheme. It is viewed that a Public
Notice can be issued under proviso to Para 10 of Notification 16/2015-Cus dated 01.04.2015 only on a prospective basis. There can not be a
Standing Public Notice to the effect that Dhamra Port has been notified as eligible Port for EPCG Scheme for all times. Otherwise a Standing
Public Notice, declaring a non-eligible port as eligible Port for EPCG purposes, shall tantamount to circumventing the Customs Notification
No.16/2015-Cus dated 01.04.2015, which has clearly specified the name of eligible ports therein. Reading contexctually, the Special Order, to be
issued by the Commissioner should also be prospective from the date of arrival of goods. It is felt that it is not possible for the Special Order to be
retrospective, when the Public Notice will be prospective in nature. Both should have prospective operation only and not be contradictory to each
other.
Thus in my view, the Public Notice/Special Order to be issued by the Commissioner in exercise of power under Para 10 of Notification
No.16/2015-Cus dated 01.04.2015 should have been issued prior to the date of arrival of goods in India. In the instant case, I find that M/s.
Dhamra Port Company Limited (DPCL) applied to Jt. DGFT, Cuttack on 30.04.2016 for EPCG Licence, but no intimation was given to Customs
Department requesting for issue of Public Notice/Special Order in anticipation of getting the EPCG License. The vessel, MV ZHEN HUA 8,
arrived in Dhamra on 5/5/2016, but the Customs Department was informed only on 9/5/2016, even though 5th & 6th May, 2016 were working
days in Commissionerate Headquarters. I also find that the EPCG license (issued by DGFT on 13.05.2016) was registered in Paradeep Customs
House on 06.06.2016, which is a notified port under Notification No.16/2015-Cus dated 01.04.2015. However, the action of Assistant
Commissioner, Paradeep Customs House in issuing RA for ent ire consignment in favour of Dhamra Customs (a non-specified port for EPCG
Scheme) on 07.06.2016 is entirely wrong, as the Commissioner had not accorded the Special Order declaring Dhamra to be eligible for EPCG
Scheme till such time and the RA should be cancelled forthwith.
In terms of Para 2.13 of the Foreign Trade Policy (2015-20), the DGFT can issue EPCG license in respect of goods which have been
imported/shipped/arrived in advance, but not cleared from Customs. It implies that EPCG License can be issued with retrospective effect.
However, the same aspect of retrospective nature is not mentioned in Notification No.16/2015-Cus dated 01.04.2015. As stated earlier,
reference to the Board by the Commissioner, Customs (Preventive) were also not answered affirmatively in favour of M/s. DPCL.
M/s. DPCL has referred to similar importation done earlier in the year, 2009. On perusal of the relevant File No. VIII(43)1/Cus/B-I/2007, I
find that M/s. DPCL had kept the Customs Department informed abouit the importation and clearance under EPCG Scheme before the arrival of
the imported goods. Thus the earlier importation reference given by DPCL also does not help their cause this time.
Challenging the aforesaid order passed by the Commissioner, the present writ petition has been came to be filed on various grounds stated in the
writ petition. The customs authorities came to file counter-affidavit sworn to by Sri Jayanta Baidyamajumder, Assistant Commissioner under the
Commissioner, Customs (Preventive), Bhubaneswar dated 25.10.2017 and further additional counter affidavit dated 04.12.2017 has came to be
filed on behalf of customs pursuant to our direction issued on 27.11.2017 appending thereto certain communication made by the Commissioner,
Customs(Preventive), Bhubaneswar with the Central Board of Excise and Customs.