Delhi High Court
M/S Om Gems And Jewellery vs Deputy Commissioner Of Customs … on 21 January, 2025
Bench: Prathiba M. Singh, Dharmesh Sharma
$~33
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 21st January, 2025
+ W.P.(C) 6218/2024 & CM APPL.25897/2024
M/S OM GEMS AND JEWELLERY .....Petitioner
Through: Mr. Kishore Kunal, Ms. Runjhun Pare,
& Mr. Jayesh Sitlani, Advs. (M:
9425901526)
versus
DEPUTY COMMISSIONER OF CUSTOMS (IMPORT) AIR
CARGO COMPLEX NSCBI AIRPORT & ORS. .....Respondents
Through: Mr. Satish Aggarwala, Sr. Standing
Counsel for Indirect Taxes,
Department of Revenue for R-1.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE DHARMESH SHARMA
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner- M/s. Om Gems &
Jewellery challenging the assessment order dated 23rd February, 2024 passed
by the Adjudicating Authority and sought release of the bank guarantee
amounting to Rs. 22,07,264/- from the Respondent. This is the second round
of litigation. The earlier round has culminated in the decision of this Court in
M/s. Om Gems & Jewellery v. Principal Commissioner, Directorate of
International Customs, Free Trade Agreements (FTA) Cell New Delhi &
Ors., 2023:DHC:8984-DB which was disposed of vide order dated 14th
December, 2023.
3. The brief background of this case is that the Petitioner had imported a
W.P.(C) 6218/2024 Page 1 of 7
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consignment of gold jewellery from Indonesia and had availed the benefit of
exemption Notification No.46/2011-CU dated 01st June, 2011 and
Notification No.12/2012-CE dated 7th March, 2012. According to the
Petitioner, the said Notifications granted benefit of NIL rate of Basic Customs
Duty (‘BCD’). The authority, however, vide order dated 23rd January, 2016
directed the Petitioner to submit a Bank Guarantee and Bond for an amount
equivalent to 100% of the differential BCD.
4. The said order dated 23rd January, 2016 was challenged by the
Petitioner and in an appeal, the goods were directed to be released, subject to
accepting 20% of the duty on the imported goods along with Bond. Pursuant
thereto, the Bank Guarantee for the sum of Rs.22,07,264/- was furnished by
the Petitioner and even the Countervailing Duty (‘CVD’) was paid for an
amount of Rs.6,67,936/- and the provisional assessment was, accordingly,
done on 19th July, 2016.
5. Repeatedly, the Petitioner sought finalization of the assessment.
However, the same was not done, which led to filing of the writ petition being
W.P.(C) 11831/2023. The reliefs sought in the said writ petition were as
under:
“That this Hon’ble Court be pleased to issue a Writ of
mandamus, or any other appropriate Writ, order, or
direction, directing the Respondents to finalize the
provisional assessment of Bill of Entry 2894698 dated
12.10.2015 (ANNEXUREP1 at Page No.49-52) and
release the Bank Guarantee dated 13.07.2016 furnished
by the Petitioner, back to the Petitioner along with
applicable interest (ANNEXURE-P4 at Page No.55-
59);
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(b) For such further and other reliefs, including costs of
this Petition, as this Hon’ble Court may deem fit and
proper in the nature and circumstance of the case.”
6. In the said petition, the Coordinate Bench of this Court considered the
matter and vide order dated 14th December, 2023, finally directed as under:
“24. On an overall consideration of the above, we find
that the claim for interest as raised by the petitioner
clearly merits acceptance. As we had found
hereinabove, the DRI had duly completed the COO
Certificates verification exercise and had also shared
the requisite results thereof with the respondents.
Despite the above, the respondents failed to conclude
the provisional assessment proceedings. The
information in respect of the COO Certificate
verification had been shared with the field authorities
way back in 2016. There was thus no justification for the
respondents having failed to render a closure to the
proceedings at that stage itself. We were also not
apprised of any other legal impediment that may have
operated and restrained the respondents from finalizing
the provisional assessment. It also becomes pertinent to
note that the provisional assessment itself was initiated
not on an allegation of any undervaluation or wrongful
declaration of the value of goods, the same was founded
solely on the opinion formed by the respondents that the
COO Certificates merited verification. In view of the
above, we are of the considered opinion that the
indolence exhibited by the respondents is rendered
wholly arbitrary.
25. The writ petition consequently stands allowed. The
respondents are directed to release the BG and any
other monies retained forthwith subject to whatever
final orders that they may choose to pass while
finalizing the provisional assessment proceedings. The
petitioner is also held entitled to be compensated by way
of payment of interest @ 6% per annum on that refundW.P.(C) 6218/2024 Page 3 of 7
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which shall commence from 17 March 2016 when the
DRI shared the verification reports till such time as the
monies are ultimately repaid.”
7. As can be seen from the above judgment, the Bank Guarantee was
directed to be released along with interest at 6% per annum. However, the
same was subject to final orders that could be passed by the authority after the
finalization of provisional assessment proceedings.
8. The Bank Guarantee, as directed by the Division Bench, has not been
released by the Customs Department. In the meantime, however, vide the
order dated 23rd February, 2024, the final assessment order has been passed,
which is assailed before this Court in this petition.
9. In terms of the final impugned assessment order dated 23rd February,
2024, demands were raised and penalties were imposed on the Petitioner. The
said order by the Office of the Pr. Commissioner of Customs (Airport & ACC)
reads as under:
“55. On the basis of facts and observations mentioned
above and as per the directions of the Order of the
Hon’ble Delhi High Court pronounced on 14.12.2023 in
the matter of import of gold jewellery from Indonesia by
the importer M/s Om Gems & Jewellery (IEC
0507087437), against Bill of Entry No. 2894698 dated
12.10.2015 under the claim of benefit under the
notification no. 46/2011-Cus, dated 01.06.2011 read
with notification no. 189/2009- Cus (NT) dated
31.12.2009 as amended the preferential treatment of the
goods imported vide Bill of Entry No. 2894698 dated
12.10.2015 is being denied.
Accordingly, I order for the final assessment of the gold
jewellery imported from Indonesia denying the
preferential treatment of the goods with Basic CustomsW.P.(C) 6218/2024 Page 4 of 7
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Duty @ 15% against Bill of Entry No. 2894698 dated
12.10.2015.
I also order for making appropriate adjustments for
recovery of the amount of differential duty that shall
arise on denial of the above benefit and the duty already
paid from the bank guarantee submitted as security.
I also order for payment of the interest as applicable
under sub-section (3) of Section 18 of the Customs Act
1962 on finalization of the above provisional assessmentFinally, in accordance with the directions of the Hon’ble
High Court I also order that the amount of differential
duty and the interest applicable as discussed above shall
be paid by the importer only after adjustment of the
interest @ 6% per annum w.e.f. 17.3.2016 that has
accrued on the above bank guarantee amount”
10. In terms of the above order, it can be seen that the Customs has directed
adjustment of the amount payable to the Petitioner in terms of the Division
Bench judgment dated 14th December, 2023. The amount payable by the
Petitioner is also not quantified in the said order.
11. Ld. Counsel for the Petitioner has made two fold submissions:
That the final assessment is highly belated and hence the entire
proceeding itself deserves to be quashed;
That the Customs department is guilty of dereliction as the bank
guarantee is not released till date.
12. As per the counter affidavit, Mr. Aggarwala, ld. Counsel submits that
the amount payable would be Rs.1,02,68,969/- along with interest. On being
queried, as to why the counter affidavit does not even consider the order of
the Division Bench, Mr. Aggarwala submits that the same is a lapse on behalf
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of the department.
13. Heard. There can be no doubt about two facts, firstly that the Division
Bench judgment had to be complied with and the Customs Department could
not hold back compliance thereof by directing adjustment in the final order.
Such a course of action would not be permissible. Secondly, insofar as the
impugned order is concerned, the same is an appealable order. Delay in
passing the impugned assessment order is a ground on which the Petitioner
seeks to challenge the same. The ground of delay can also be raised in the
appeal. The appellate forum would then consider the reliefs sought in the first
writ petition also while deciding whether there was delay.
14. This Court is also not to go into computation in terms of the impugned
order. That would be a factual determination. Since the impugned order is
appealable, this Court does not wish to go into merits of the order or the aspect
of delay. Accordingly, in the overall circumstances, the following directions
are being issued:
(i) The Petitioner is permitted to file an appeal challenging the
impugned order dated 23rd February, 2024 within a period of 30
days from today along with requisite pre-deposit in terms of the Act;
(ii) The judgment dated 14th December, 2023, shall be given full effect
and the Bank Guarantee along with the interest, shall be released in
favour of the Petitioner within eight weeks. These two acts shall be
carried out independently of each other and shall not be dependent
on one another;
(iii) The Commissioner (Appeals) shall adjudicate the appeal against the
impugned assessment order dated 23rd February, 2024 without being
prejudiced either by the present order or the earlier order passed byW.P.(C) 6218/2024 Page 6 of 7
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this Court at the stage of provisional assessment.
15. There is also a reply affidavit, which has been filed by the
Commissioner of Customs, Calcutta in which the stand is being taken by the
Department that the amount, which has been deposited by way of a Bank
Guarantee, jeopardized the interest of revenue. The Court notices a serious
lapse in the said affidavit as the affidavit which is dated 7th May, 2024 does
not take into consideration the judgment passed by this Court on 14th
December, 2023. Such lapses ought not to be repeated.
16. If the Bank Guarantee along with interest is not released, the
official/officer concerned shall be personally responsible for the same. If that
is so, the Petitioner is permitted to move an application before this Court.
17. The present petition is disposed of in the above terms. All pending
applications are also disposed of.
PRATHIBA M. SINGH
JUDGE
DHARMESH SHARMA
JUDGE
JANUARY 21, 2025/dk/ks
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Signing Date:22.01.2025
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