P&H High Court Holds Customs Authorities Cannot Initiate Proceedings Once Export Obligation Is Fulfilled and Bond Is Redeemed
In a landmark judgment, the High Court of Punjab and Haryana at Chandigarh has held that Customs Authorities cannot initiate proceedings against an assessee once the export obligation has been discharged and the bond has been redeemed. The judgment came in an appeal filed by the Commissioner of Customs, Ludhiana against M/s Jindal Drugs Ltd. The Court, comprising Hon’ble Ms. Justice Ritu Bahri and Hon’ble Mrs. Justice Manisha Batra, dismissed the appeal and set aside the impugned order passed by the Customs, Excise & Service Tax Appellate Tribunal.
The case involved the loss of imported goods, specifically 50 MT of Cocoa Paste, during transit from the port to the factory. The respondent, M/s Jindal Drugs Ltd., informed the department about the loss and replaced the lost quantity by purchasing Cocoa Paste from the local market to fulfill their export obligation. Notably, the respondent did not claim any rebate or duty drawback during the export.
The appellant, Commissioner of Customs, demanded duty on the imported goods, imposed penalties, and ordered redemption of fine. The impugned order confirmed the demand of duty and imposed a redemption fine, but the Tribunal allowed the respondent’s appeal, setting aside the order.
The High Court, in its judgment, held that once the export obligation was discharged and the bond was redeemed, Customs Authorities were precluded from initiating proceedings against the respondent-assessee. The Court emphasized that there was no violation of the conditions of the relevant notification and found no illegality or perversity in the impugned order.
The Court further noted that the appellant’s counsel failed to cite any judgments supporting their contention that Customs Authorities could initiate proceedings even after the fulfillment of export obligations and redemption of the bond. Consequently, the appeal was dismissed.
This judgment has significant implications for the customs-related cases in the region, providing clarity on the rights and obligations of importers/exporters once their export obligations are fulfilled. It underscores the importance of adhering to the conditions of relevant notifications and the role of Customs Authorities in administering customs laws effectively.
Date of decision: 24.05.2023
Commissioner of Customs, Ludhiana vs M/s Jindal Drugs Ltd.
