High Court Division :
(Special Original Jurisdiction)
Md Miftah Uddin
Choudhury J
ANM Mashir Ullah J
Elaine Apparels Limited
…………..Petitioner
vs
Commissioner of Customs, Chittagong
And others…………..
………….. Respondents
Judgment
June 16th, 2016
Customs Act (IV of 1969)
Section 22
No re-import was made by the petitioner rather he was compelled to take back his product which was already on board for the reasons created by the buyer in Russia and this fact is admitted by Customs authority itself as evident from their own letter the petitioner has got no fault, rather he was bound to take back his finished products. Such taking back is not re-import as it defined in Section 22 of the Act. The petitioner has got scope to re-export the same without making any payment as duties, or to sale the same in local market by making payment of VAT, but without giving such scope though the petitioner made prayer the customs authority made the impugned demand which are apparently illegal. … (12)
Imtiaz Moinul Islam, Advocate-For the Petitioner.
SM Moniruzzaman, Deputy Attorney General, with Mosammat Khairunnesa, Assistant Attorney General, with Shuchira Hossain, Assistant Attorney General-For the Respondent No?
Judgment
Md Miftah Uddin Choudhury J : In this Writ Petition the petitioner or challenged the demand notices dated 6-12-2015 and 10-1-2016, issued by the respondent No.3 Assistant Commissioner of Customs, Customs House, Chittagong vide Memo No.16378/AP Section 13/14-15/7933(2) and 16378/AF Section-13/14-15/563 demanding Taka 54,44, 971.07 (Taka fifty four lacs forty four thousands nine hundreds severity one and paisa seven) as pending government revenue for his failure to re-export, and also sought for an order directing the respondent Nos.1 and 2 to permit him to re-export 7865 pieces of ladies pants within 1 (one) year and/or sell them locally and to pay the relevant VAT.
2. For disposal the case in brief, that the petitioner company has been running business of producing and exporting readymade garments. In response of an export order on CM basis from Melon Fashion Group, a Russia based international buyer of garment products, through their local agent Unicorn Designers Limited (respondent No.5) produced 32,554 pieces or ladies trousers for export to Russia. Before such production the petitioner company entered into a purchase contract with said Melon Fashion Croup. To import said quantity of trousers the said Melon Fashion Croup opened Letter of Credit No. DOCDC-466/14-RD dated 8-8-2014 for US $ 2,09,730. In order to export as per said export L/C, the petitioner opened Back to Back L/C No.013814041400 dated 25-8-2014 for US $ 32,557.60 in favour of a local fabric supplier named Z&Z. Textile, Narshingdi and started production. By using the fabric supplied by said Z&Z Textile, the petitioner produced 7,865 pieces of ladies trousers valued at US $ 47,190, As per instruction of said Melon Fashion Croup and it’s local agent the Unicorn, petitioner made shipment of 7,865 pieces of ladies trousers through Chittagong port. On the way to Russia when the said consignment was in a German port the said buyer Melon Fashion Croup told the petitioner that the season for such products expired and instructed the petitioner to bring the goods back, and re-export the same after changing its label and bar code. In such stage after production and shipment, the petitioner had no option in Case of refusal of the buyer to accept the goods.
The shipment of those goods was made after its inspection by the respondent No.5 the local agent of the said buyer Melon Fashion Group. That the shipment was made within L/C period without causing any delay and, as such, the question of expiry of season cannot arise. The said buyer Melon Fashion Group gave a letter of guarantee that they will accept re-export if the petitioner make the change as they desired and the respondent No.5 Unicorn guaranteed that remaining 24,689 pieces of ladies trousers will be exported normally. Being helpless the petitioner was compelled to bring back the said consignment and on 19-3-2015 get release of the trousers from Chittagong port on furnishing an undertaking dated 10-2-2015 that he will re-export the same within six months. Said undertaking dated 10-2-2015 that he will re-export the same within six months time to re-export as per a memo of National Board of Revenue being Memo No.2(2)tax export & bond/96(part-1)/308 dated 5-6-2007. The BGMEA requested the respondent No.1 to help the victim petitioner and the concerned lien bank also gave no objection certificate since everybody realized petitioner’s helpless condition for no fault of him. The respondent No. 1 Commissioner of Custom, Customs House, Chittagong vide its letter No. ?????/???/???????????/?????? 13/14-15 dated 9-2-2015 gave permission and ordered its officials to release the goods and deliver to petitioner’s bonded ware house. Ultimately the respondent No.5 the agent of the said buyer defrauded the petitioner and never took a single piece of the finished goods. By this time the petitioner also produced the rest quantity as per the export L/C and even the petitioner requested for receipt of the produced garments nm 40% discount rate of the total LC value. After such proposal the said buyer in reply proposed that- 35% of the total LC value shall be paid but only 20% of that said 30%, will be paid after shipment and rest 80% will be paid after 90 days of shipment. In such circumstances the petitioner realized that in case of re-shipment to Melon, the goods will be lost forever. The petitioner has been trying to re-export the goods to other buyers. Suddenly the respondent No.1 issued impugned demand notices dated 6-12-2015 and 10-1-2016 under signature of the respondent No.3 vide memo Nos.16378/ AP /section-13/14-15/793(2) and 16378/AP/section-13/14-15/563 demanding Taka 54,44,971.07 (Taka fifty four lacs forty four thousands nine hundreds seventy one and paisa seven) as pending Government revenue for petitioner’s failure to re-export. The second demand notice dated 10-1-2016 was issued under signature of the respondent No.3 vide Memo No.16378/ AP /section-J3/14-15 and it was received by the petitioner on 19-1-2016. The goods worth about US$47,190 released from the respondent No.1 for re-exporting are lying exactly as it was in petitioners bonded warehouse. The petitioner by a letter dated 13-10-2010 requested the respondent Nos.1-3 to withdraw the said demand notices and to permit him to sale 7865 pieces of ladies trouser in local market on payment of relevant VAT. But the said respondents did not give any reply though they receipt the said letter. Finding no response the petitioner through a lawyer sent a Notice Demanding Justice dated 18-1-2016 requesting the respondent No.1 to do what they are lawfully required to do, but the respondent did not pay any heed.
3. In such circumstances, finding no other alternative the petitioner by filing this Writ Petition moved this Court and obtained the Rule.
4. To oppose the Rule the respondent No.1 filed an Affidavit-in-Opposition. They gist of the Affidavit-in-Opposition is that the petitioner furnished an undertaking that he will re-export within six months from the date of receiving the goods from the Customs authority but failed, as such he is liable to pay the demanded amount for his failure to re-
export within six months.
5. Imtiaz Moinul Islam, learned Advocate appearing for the petitioner submits that the Customs authority can make such demand in case of re-importing the goods produced or manufactured in Bangladesh as it provides in Section 22 of the Customs Act. But in the instant case no question of re-importation can arise because the petitioner did not re-import the same, rather for rejection by the buyer to accept the goods he was compelled to take back the same, and in case of such taking back as per the law of the country he is entitle to re-export the same to any other buyer, and even in case of his failure to make such re-export within one year he can sell the same in local market by making payment of due VAT
6. In support of his such submission Imtiaz Moinul Islam referred the provision of Section 22 of the Customs Act, Chapter 4 Article 13 of the Import Policy Order and Articles 2,4,8. of the Export Policy Order 20-12-2015.
7. He further submits that the Customs authority took undertaking from the petitioner as per the memo issued in 2007 by the National Board of Revenue mentioned above but that
memo is not applicable upon the exporter of garments products like the petitioner after formulation of the Export and Import Policy, 2012-2015 and this fact is admitted by Customs authority itself as it evident from their own letter No. ?????/???/???????????/????????/??-?? dated 9-2-2015.
8. He further submits that the Customs authority without any prior show cause notice suddenly made the demand but the impugned notices violating the principle of natural justice.
9. In support of such submission Imtiaz Moinul Islam cited the decision in the case of Sk. Akijuddin Limited vs. National Board of Revenue and others, reported in 16 BLC 692.
10. In reply of his such argument Mosammat Khairunnessa, learned Assistant Attorney General, appearing for the respondent No.1 submits that for failure of the petitioner to make re-export of his product within six months mentioned in the under taking furnished by him there is no further scope to re-export or sale the same in local market and, as such, he is bound to make payment of the demanded money. The impugned demand notices are not illegal and the Rule is liable to be discharged.
11. In course of his submission Mr Imtiaz Moinul Islam has shown us newly received “Export Orders” received by the petitioner and submits that within short time as per those orders he will be able to re-export his products. Though Mr Imtiaz Momul Islam did not file any supplementary-affidavit annexing those orders but we find no reason to disbelieve such orders.
12. However whether the petitioner has got new order is not the subject matter of the Rule, rather the subject matter is whether as per the law the Customs authority can make the demands impugned in this writ petition. On reading the provision of Section 22 of the Customs Act we hold the view that in the instand case no re-import was made by the petitioner rather he was compelled to take back his product which was already on board for the reasons created by the buyer in Russia and this fact is admitted by Customs authority itself as evident from their own letter No. 16378/???/???????????/????????/??-?? dated 9-2-2015. The petitioner has got no fault, rather he was bound to take back his finished products. Such taking back is not re-import as it defined in Section 22 of the Customs Act. On perusal of the relevant orders of Import and export Policy as mentioned above it appears to us that the petitioner has got scope to re-Export the same without making any payment as duties, or to sale the same in local market by making of payment of VAT, but without giving such scope though the petitioner made prayer the Customs authority made the impugned demand which are apparently illegal.
13. Hence, the Rule is hereby made absolute. The impugned demand notices dated 6-12-2015 and 10-1-2016 are hereby set aside. The Customs authority is hereby directed to allow the petitioner to re-export his aforesaid products or to sale the same in the local market on receipt of proper VAT.
However, there is no order as to costs.
(Special Original Jurisdiction)
Md Miftah Uddin
Choudhury J
ANM Mashir Ullah J
Elaine Apparels Limited
…………..Petitioner
vs
Commissioner of Customs, Chittagong
And others…………..
………….. Respondents
Judgment
June 16th, 2016
Customs Act (IV of 1969)
Section 22
No re-import was made by the petitioner rather he was compelled to take back his product which was already on board for the reasons created by the buyer in Russia and this fact is admitted by Customs authority itself as evident from their own letter the petitioner has got no fault, rather he was bound to take back his finished products. Such taking back is not re-import as it defined in Section 22 of the Act. The petitioner has got scope to re-export the same without making any payment as duties, or to sale the same in local market by making payment of VAT, but without giving such scope though the petitioner made prayer the customs authority made the impugned demand which are apparently illegal. … (12)
Imtiaz Moinul Islam, Advocate-For the Petitioner.
SM Moniruzzaman, Deputy Attorney General, with Mosammat Khairunnesa, Assistant Attorney General, with Shuchira Hossain, Assistant Attorney General-For the Respondent No?
Judgment
Md Miftah Uddin Choudhury J : In this Writ Petition the petitioner or challenged the demand notices dated 6-12-2015 and 10-1-2016, issued by the respondent No.3 Assistant Commissioner of Customs, Customs House, Chittagong vide Memo No.16378/AP Section 13/14-15/7933(2) and 16378/AF Section-13/14-15/563 demanding Taka 54,44, 971.07 (Taka fifty four lacs forty four thousands nine hundreds severity one and paisa seven) as pending government revenue for his failure to re-export, and also sought for an order directing the respondent Nos.1 and 2 to permit him to re-export 7865 pieces of ladies pants within 1 (one) year and/or sell them locally and to pay the relevant VAT.
2. For disposal the case in brief, that the petitioner company has been running business of producing and exporting readymade garments. In response of an export order on CM basis from Melon Fashion Group, a Russia based international buyer of garment products, through their local agent Unicorn Designers Limited (respondent No.5) produced 32,554 pieces or ladies trousers for export to Russia. Before such production the petitioner company entered into a purchase contract with said Melon Fashion Croup. To import said quantity of trousers the said Melon Fashion Croup opened Letter of Credit No. DOCDC-466/14-RD dated 8-8-2014 for US $ 2,09,730. In order to export as per said export L/C, the petitioner opened Back to Back L/C No.013814041400 dated 25-8-2014 for US $ 32,557.60 in favour of a local fabric supplier named Z&Z. Textile, Narshingdi and started production. By using the fabric supplied by said Z&Z Textile, the petitioner produced 7,865 pieces of ladies trousers valued at US $ 47,190, As per instruction of said Melon Fashion Croup and it’s local agent the Unicorn, petitioner made shipment of 7,865 pieces of ladies trousers through Chittagong port. On the way to Russia when the said consignment was in a German port the said buyer Melon Fashion Croup told the petitioner that the season for such products expired and instructed the petitioner to bring the goods back, and re-export the same after changing its label and bar code. In such stage after production and shipment, the petitioner had no option in Case of refusal of the buyer to accept the goods.
The shipment of those goods was made after its inspection by the respondent No.5 the local agent of the said buyer Melon Fashion Group. That the shipment was made within L/C period without causing any delay and, as such, the question of expiry of season cannot arise. The said buyer Melon Fashion Group gave a letter of guarantee that they will accept re-export if the petitioner make the change as they desired and the respondent No.5 Unicorn guaranteed that remaining 24,689 pieces of ladies trousers will be exported normally. Being helpless the petitioner was compelled to bring back the said consignment and on 19-3-2015 get release of the trousers from Chittagong port on furnishing an undertaking dated 10-2-2015 that he will re-export the same within six months. Said undertaking dated 10-2-2015 that he will re-export the same within six months time to re-export as per a memo of National Board of Revenue being Memo No.2(2)tax export & bond/96(part-1)/308 dated 5-6-2007. The BGMEA requested the respondent No.1 to help the victim petitioner and the concerned lien bank also gave no objection certificate since everybody realized petitioner’s helpless condition for no fault of him. The respondent No. 1 Commissioner of Custom, Customs House, Chittagong vide its letter No. ?????/???/???????????/?????? 13/14-15 dated 9-2-2015 gave permission and ordered its officials to release the goods and deliver to petitioner’s bonded ware house. Ultimately the respondent No.5 the agent of the said buyer defrauded the petitioner and never took a single piece of the finished goods. By this time the petitioner also produced the rest quantity as per the export L/C and even the petitioner requested for receipt of the produced garments nm 40% discount rate of the total LC value. After such proposal the said buyer in reply proposed that- 35% of the total LC value shall be paid but only 20% of that said 30%, will be paid after shipment and rest 80% will be paid after 90 days of shipment. In such circumstances the petitioner realized that in case of re-shipment to Melon, the goods will be lost forever. The petitioner has been trying to re-export the goods to other buyers. Suddenly the respondent No.1 issued impugned demand notices dated 6-12-2015 and 10-1-2016 under signature of the respondent No.3 vide memo Nos.16378/ AP /section-13/14-15/793(2) and 16378/AP/section-13/14-15/563 demanding Taka 54,44,971.07 (Taka fifty four lacs forty four thousands nine hundreds seventy one and paisa seven) as pending Government revenue for petitioner’s failure to re-export. The second demand notice dated 10-1-2016 was issued under signature of the respondent No.3 vide Memo No.16378/ AP /section-J3/14-15 and it was received by the petitioner on 19-1-2016. The goods worth about US$47,190 released from the respondent No.1 for re-exporting are lying exactly as it was in petitioners bonded warehouse. The petitioner by a letter dated 13-10-2010 requested the respondent Nos.1-3 to withdraw the said demand notices and to permit him to sale 7865 pieces of ladies trouser in local market on payment of relevant VAT. But the said respondents did not give any reply though they receipt the said letter. Finding no response the petitioner through a lawyer sent a Notice Demanding Justice dated 18-1-2016 requesting the respondent No.1 to do what they are lawfully required to do, but the respondent did not pay any heed.
3. In such circumstances, finding no other alternative the petitioner by filing this Writ Petition moved this Court and obtained the Rule.
4. To oppose the Rule the respondent No.1 filed an Affidavit-in-Opposition. They gist of the Affidavit-in-Opposition is that the petitioner furnished an undertaking that he will re-export within six months from the date of receiving the goods from the Customs authority but failed, as such he is liable to pay the demanded amount for his failure to re-
export within six months.
5. Imtiaz Moinul Islam, learned Advocate appearing for the petitioner submits that the Customs authority can make such demand in case of re-importing the goods produced or manufactured in Bangladesh as it provides in Section 22 of the Customs Act. But in the instant case no question of re-importation can arise because the petitioner did not re-import the same, rather for rejection by the buyer to accept the goods he was compelled to take back the same, and in case of such taking back as per the law of the country he is entitle to re-export the same to any other buyer, and even in case of his failure to make such re-export within one year he can sell the same in local market by making payment of due VAT
6. In support of his such submission Imtiaz Moinul Islam referred the provision of Section 22 of the Customs Act, Chapter 4 Article 13 of the Import Policy Order and Articles 2,4,8. of the Export Policy Order 20-12-2015.
7. He further submits that the Customs authority took undertaking from the petitioner as per the memo issued in 2007 by the National Board of Revenue mentioned above but that
memo is not applicable upon the exporter of garments products like the petitioner after formulation of the Export and Import Policy, 2012-2015 and this fact is admitted by Customs authority itself as it evident from their own letter No. ?????/???/???????????/????????/??-?? dated 9-2-2015.
8. He further submits that the Customs authority without any prior show cause notice suddenly made the demand but the impugned notices violating the principle of natural justice.
9. In support of such submission Imtiaz Moinul Islam cited the decision in the case of Sk. Akijuddin Limited vs. National Board of Revenue and others, reported in 16 BLC 692.
10. In reply of his such argument Mosammat Khairunnessa, learned Assistant Attorney General, appearing for the respondent No.1 submits that for failure of the petitioner to make re-export of his product within six months mentioned in the under taking furnished by him there is no further scope to re-export or sale the same in local market and, as such, he is bound to make payment of the demanded money. The impugned demand notices are not illegal and the Rule is liable to be discharged.
11. In course of his submission Mr Imtiaz Moinul Islam has shown us newly received “Export Orders” received by the petitioner and submits that within short time as per those orders he will be able to re-export his products. Though Mr Imtiaz Momul Islam did not file any supplementary-affidavit annexing those orders but we find no reason to disbelieve such orders.
12. However whether the petitioner has got new order is not the subject matter of the Rule, rather the subject matter is whether as per the law the Customs authority can make the demands impugned in this writ petition. On reading the provision of Section 22 of the Customs Act we hold the view that in the instand case no re-import was made by the petitioner rather he was compelled to take back his product which was already on board for the reasons created by the buyer in Russia and this fact is admitted by Customs authority itself as evident from their own letter No. 16378/???/???????????/????????/??-?? dated 9-2-2015. The petitioner has got no fault, rather he was bound to take back his finished products. Such taking back is not re-import as it defined in Section 22 of the Customs Act. On perusal of the relevant orders of Import and export Policy as mentioned above it appears to us that the petitioner has got scope to re-Export the same without making any payment as duties, or to sale the same in local market by making of payment of VAT, but without giving such scope though the petitioner made prayer the Customs authority made the impugned demand which are apparently illegal.
13. Hence, the Rule is hereby made absolute. The impugned demand notices dated 6-12-2015 and 10-1-2016 are hereby set aside. The Customs authority is hereby directed to allow the petitioner to re-export his aforesaid products or to sale the same in the local market on receipt of proper VAT.
However, there is no order as to costs.
