By TIOL News Service

NEW DELHI, AUG 13, 2015: THE appellant is aggrieved by the impugned judgment of the High Court whereby the High Court has refused to allow the appellant import of Web Printing Machine on concessional rate of custom duty. The appellant had tried to avail the concessional rate of custom duty on the import of the aforesaid machine under Open General Allowance with the aid of Notification No. 114/80-CUS, dated 19.06.1980. The High Court has held that the said Notification is not applicable in the instant case as the appellant has not been able to satisfy one particular eligibility condition contained therein. One of the conditions needs to be satisfied to avail the concessional rate of duty @ 35% ad valorem under the aforesaid Notification is that the machine is having output of 30,000 or more copies per hour. Whereas the appellant contends that the machine in question churned out 36,000 copies per hour, the High Court has found it otherwise. As per the High Court the output of the machine was 25,000 copies per hour, which was reflected in the leaflet of the manufacturer of the machine, which leaflet was filed along with Bill of Entry.

The appellant had imported one printing machine of make 'Harris Graphic V- 15H Model' which arrived at Mumbai airport on 24.10.1987. Custom house agent of the appellant filed Bill of Entry for Home Consumption under OGL on 13.11.1987 and claimed concessional rate of duty under Notification No. 114/80-CUS. On 26.11.1987, the Appraiser of Customs House, Bombay issued a query memo with regard to the printing capacity of the imported machine which had been shown in the import invoice as 36,000 copies per hour, but was shown as 25,000 in the leaflet furnished along with the Bill of Entry. Some other queries were also raised. The appellant answered the issue on 21.01.1988. Having not been satisfied with the reply furnished by the appellant, the customs authorities directed it to warehouse the goods under Section 49 of the Customs Act, 1962 after depositing the admitted customs duty. Accordingly, the imported machine was warehoused.

Thereafter, some queries regarding the output of the machine were raised and the appellant tried to meet them. It also filed communications received from the manufacturer explaining that the machine was custom-made for Indian purposes, i.e, for the appellant enhancing its capacity to 36,000 copies per hour as against normal capacity of 25,000 copies, which is the normal product manufactured by the said manufacturer. On that basis, the appellant wrote to the customs authorities for arranging physical examination of the consignment to satisfy themselves that the machine in question was capable of giving output of 36,000 copies per hour. However, no action was taken by the customs authorities thereafter.

Taking note of the inaction of the customs authorities to get the imported consignment physically inspected and proceeding with the clearance of the same, on 24.04.1988, the appellant filed a writ petition before the Bombay High Court praying for a declaration that the imported machine was covered by OGL and was entitled to the concessional rate of customs duty under Notification No. 114/80-CUS and for directing the respondents to permit clearance of the same. Interim relief of release of the machinery was also prayed for.

Pursuant to an interim order of the High Court, the appellant was allowed to clear the consignment in question. However, the main writ petition was kept pending thereafter which came up for final hearing in the year 2002, i.e. 14 years after the filing of the writ petition. By that time the imported printing machine had been in use by the appellant for all these years. The counsel appearing for the appellant, in these circumstances, impressed upon the High Court to decide itself the issue involved, namely, whether imported machine could print 36,000 copies per hour or its speed was less than 30,000 copies per hour and whether the appellant was not entitled to the benefit of the concerned Notification. The High Court went into the issue and by its detailed judgment it has decided this issue against the appellant.

The Supreme Court observed,

When the writ petition was pending, probably for this reason the Department also stayed its hands off. No doubt, there was no stay of adjudication proceedings and the competent authority could go ahead with the adjudication proceedings. However, if there was a show cause notice in the year 2002, whether it would have been time barred or not is not even required to be gone into. Such a guess game is not needed because of one simple reason. When the writ petition came up for final hearing in the year 2002, it is the appellant who is responsible for inviting the decision on merits. Even at that stage, the appellant could have simply withdrawn the writ petition as with the passing of interim order it had got the printing machine cleared from the customs authorities and was using the same. However, it did not choose to do so. Had it done so, and thereafter received show cause notice under Section 28 of the Act, it could have defended that notice raising the plea of limitation as well. Only then question would have arisen as to whether the period during which the writ petition remained pending had to be excluded or not, for the purpose of computing limitation period.

It was at the instance of the appellant that this issue was taken up for hearing. We reproduce below the following discussion in the impugned judgment touching upon this aspect:

"The long pendency of this petition for 14 years and the peculiar stand taken by the petitioners prevented us from remitting this matter to the adjudicating authorities under the Act to determine the disputed questions of fact. Left with no other alternative, we are constrained to decide this matter on merits on appreciation of evidence."

After inviting the High Court to decide the matter on merits and finding that the decision has gone against the appellant, contrary argument is nothing but a desperate attempt to chicken out of the situation which is appellant's own creation. This kind of somersault, taking completely reverse stand before us, cannot be countenanced. We, therefore, reject the contention of the appellant that High Court was not competent to decide the issue in exercise of its writ jurisdiction.

High Court's powers under writ jurisdiction:. The powers of the High Court under Article 226 of the Constitution, while issuing appropriate writs, are very wide. Even if there is an alternate remedy that may not preclude the High Court from exercising the jurisdiction in a particular case. In the face of alternate statutory remedies, when the High Court declines to exercise the jurisdiction under Article 226 of the Constitution, it is a self imposed restriction only. In the instant case, what is pertinent is that it is the appellant which not only made a prayer in the writ petition for deciding the issue in question, even at the time of hearing, it is the appellant which pressed for the decision with the submission that existence of alternate remedy should not deter the Court to render the decision on merits. In such a situation, the objection, if any, to the maintainability of the writ petition could have been taken by the respondent and it does not behove the appellant to raise this objection in the present appeal after pleading in the High Court that the matter be decided on merits.

For the same reason, the argument that the issue involved disputed question of fact is also not available. Order of the High Court clearly records that the appellant had requested the High Court to decide the issue on the basis of material on record.

On merits - whether entitled for exemption : the High Court formulated the question as to whether the appellant had discharged its burden to prove that the subject printing machine imported by it under OGL was having an output of more than 35,000 copies per hour so as to entitle it to claim exemption under Notification No. 114/80-CUS, as amended from time to time. On that touchstone, the High Court has examined, appreciated and analyzed all the documents produced by both the parties. This detailed analysis runs into several pages. It is not necessary for us to go through this evidence and discuss the same as we find that the ultimate conclusion drawn by the High Court in this behalf is correct and plausible.

We are in agreement with the view taken by the High Court on merits, having regard to the fact that burden of proof was on the appellant to establish that the machine imported by it generates more than 35,000 composite impressions or copies per hour. The appellant has failed to do so.

As a result, the appeal fails and is dismissed.

(See 2015-TIOL-179-SC-CUS)