GUJARAT NARMADA VALLEY FERTILIZERS AND CHEMICALS LTD. Vs. COMMISSIONER OF CUSTOMS
LAWS(GJH)-2014-1-131
HIGH COURT OF GUJARAT
Decided on January 30,2014

Gujarat Narmada Valley Fertilizers And Chemicals Ltd. Appellant
VERSUS
COMMISSIONER OF CUSTOMS Respondents

JUDGEMENT

Akil Kureshi, J. - (1.) PETITIONER has challenged the validity of the show -cause notice dated 7.10.2013 issued by the Commissioner of Customs, Kandla as wholly without jurisdiction. Short facts are as under: The petitioner imported coal in two consignments, on 16.1.2013 at Kandla and on 11.2.2013 at Pipalav Port in the State of Gujarat contending that the imported coal was steam coal classifiable under 27011920. Department, however, contends that the imported coal is bituminous coal attracting higher rate of duty. The coal imported by the petitioner was allowed to be cleared on provisional assessment. At Kandla, it was cleared provisionally on payment of duty treating it as steam coal whereas at Pipalav, the department insisted on collecting higher rate of duty treating the imported coal as bituminous coal and provisionally releasing it on such condition. It is stated at the bar that subsequently, pursuant to DRI inquiry, for the consignment cleared at Kandla Port also, the petitioner was required to deposit differential duty, of course, on provisional basis subject to final assessment. Be that at it may, in the present petition what is under challenge is the show -cause notice dated 7th October 2013, issued by the Commissioner. In such show -cause notice, the Commissioner has given details why the department, prima facie contends that imported coal is bituminous coal and not steam coal. On such basis, the Commissioner called upon the petitioner to show -cause why: 24. Now, therefore, M/s. Gujarat Narmada Valley Fertilizers & Chemicals Limited, P.O. Narmadanagar -392015, Distt. Bharuch, Gujarat, holder of the Import -Export Code Number 0888000685 are called upon to show cause to the Commissioner of Customs, Customs House, Near Balaji Temple, Kandla -370210, as to why: - - (i) Their claim for classification of impugned goods (as detailed in Annexure -B to this Notice) under Customs Tariff item/heading 27011920, should not be rejected and why the same should not be re -classified under Customs Tariff item/head 27011200 of the First Schedule to the Customs Tariff Act, 1975; (ii) The 37,000.000 MTs imported Coal valued at Rs. 22,17,69,407/ - (declared Assessable Value) as detailed in Annexure -B to this Notice should not be confiscated/held liable for confiscation under the provisions of Section 111(d) and 111(m) of the Customs Act, 1962; (iii) The Bill of Entry mentioned in Annexure -B to this Notice should not be finally assessed and as per correct classification, the Customs differential duty amounting to Rs. 2,35,27,516/ - (Rupees Two Crores Thirty Five Lakh Twenty Seven Thousand Five Hundred and Sixteen only) on the 37,000,000 MTs of imported impugned Coal as detailed in Annexure -B to this Notice, should not be recovered from them under Section 18(2) of the Customs Act, 1962/the bond executed during the provisional assessment/Section 28 of Customs Act, 1962. (iv) The said amount of Rs. 2,35,27,516/ - (Rupees Two Crores Thirty Five Lakhs Twenty Seven Thousand Five Hundred and Sixteen only) deposited by them vide TR6 Chellan No. 109/12 -13 dated 04.03.2013 towards payment of differential Customs duty in imports of Bituminous Coal vide B/E No. No. 9035613 dated 16.01.2013 already Customs Cleared consignment, shown at Sr. No. 1 of Annexure -B to this Notice should not be appropriated and adjusted towards their duty liability mentioned at (iii) above. (v) Interest should not be recovered from them on the said differential Customs duty, as at (iii) above, under Section 18(3) of the Customs Act, 1962/under section 28AA of the Customs Act, 1962. (vi) Penalty should not be imposed on them under section 112(a) of the Customs Act, 1962.
(2.) IT is this show -cause notice that the petitioner has challenged only on the ground that even before finalisation of the provisional assessment, issuance of notice for recovery of the duty is without jurisdiction. At the outset, learned counsel Shri Trivedi for the petitioner did not dispute the competence of the Commissioner to undertake final assessment and the classification of the goods. He, however, contended that such classification must be first completed before any duty demand can be raised. He would contend that such classification must be first completed under section 18 of the Customs Act, 1962 and only thereafter, any duty demand under section 28 of the said Act could arise.
(3.) WE may record that with respect to the central controversy between the parties, namely, whether the coal imported is bituminous coal or steam coal, the petitioner has not raised any contentions before us. Even otherwise, we notice that two previous importers under similar circumstances had challenged the show -cause notices, in which in our two separate orders both dated 9.5.2013 passed in Special Civil Application Nos. 7228 of 2013 and 8659 of 2013, we had refused to interfere holding that at the show -cause notice stage, it would not be appropriate for us to examine the highly disputed questions of facts and law. In one such order, we had observed as under: 4. We are, however, of the opinion that the challenge of the petitioner being at the stage where mere show -cause notice has been issued by the department, at this stage no interference is called for. It is by now well -settled that the court would not encourage litigation at the stage of show -cause notice. The noticee would have sufficient opportunity to meet with all the allegations and produce such material on record as may be required. In case of Special Director v. Mohd. Ghulam Ghouse : AIR 2004 SC 1467, it was held and observed as under:;


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