IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.GIRI MONDAY, THE 6TH APRIL 2009 / 16TH CHAITHRA 1931 WP(C).No. 28880 of 2008(K) --------------------------------------- PETITIONER: ------------------- M/S.JEWEL CLASSIC HOTELS PVT LTD, KUNJUPURA ROAD, KARNAL, HARYANA, REPRESENTED BY ITS DIRECTOR MANBEER CHAUDHARY. BY ADVS. MR.P.A.AUGUSTIAN, MR.T.R.JAGADEESH. RESPONDENTS: ------------------------ 1. THE UNION OF INDIA, REPRESENTED BY THE SECRETARY, MINISTRY OF FINANCE, (DEPARTMENT OF REVENUE),NORTH BLOCK, NEW DELHI-110 001. 2. ASSISTANT COMMISSIONER OF CUSTOMS (GR VII) CUSTOM HOUSE, WILLINGTON ISLAND, KOCHI-682 009. 3. THE JOINT DIRECTOR GENERAL OF FOREIGN TRADE, L.482,MODEL TOWN, PANIPAT. *ADDL. R4 IS SUO-MOTU IMPLEADED: *ADDL.R4. ASSISTANT COMMISSIONER, CITY INTELLIGENCE UNIT (CIU), COCHIN. *IS SUO MOTU IMPLEADED AS PER JUDGMENT DT. 06/04/09 IN W.P.(C). 28880/2008-K. R1 BY MR. P. PRAMESWARAN NAIR, ASST. S.G, R2 BY ADV. MR.P.GOPINATH MENON, S.C. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 06/04/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C). NO.28880/2008-K: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE LICENSE NO. 3330000034. EXT.P.2: COPY OF THE BILL OF ENTRY. EXT.P.3: COPY OF THE TR6 CHALLAN. EXT.P.4: COPY OF THE BOND. EXT.P.5: COPY OF THE BANK GUARANTEE. EXT.P.6: COPY OF THE DOCUMENT REGARDING FOREIGN EXCHANGE EARNING. EXT.P.7: COPY OF THE REDEMPTION LETTER DTD. 06/12/2006. EXT.P.8: COPY OF THE LETTER DTD. 08/12/2006. EXT.P.9: COPY OF THE LETTER DTD. 23/03/2007. EXT.P.10: COPY OF THE LETTER DTD. 04/04/2007. EXT.P.11: COPY OF THE LEGAL NOTICE DTD. 28/01/2008. EXT.P.12: COPY OF THE REPLY DTD. 15/02/2008. EXT.P.13: COPY OF THE COMMUNICATION DTD. 22/02/2008. EXT.P.14: COPY OF THE CORRIGENDUM DTD. 09/07/2008. RESPONDENTS' EXHIBITS: NIL //TRUE COPY// P.S. TO JUDGE. Prv. V.GIRI, J. ------------------------------------- W.P.(C).No.28880 of 2008 ------------------------------------- Dated this the 6th day of April, 2009. JUDGMENT The petitioner, a holder of a licence issued under the Export Promotion Capital Goods Scheme (for short 'the EPCG Scheme}, imported Toyota Land Cruiser car at the concessional rate of duty contemplated under the EPCG scheme as evidenced by Ext.P1, on 24.10.2002. 50% of the face value alone was remitted and the import was made subject to the conditions under which EPCG licence was granted, which included an export obligation on the part of the licensee. 2. It is submitted that the petitioner had fulfilled the export obligation as per the import policy and submitted documentary evidence. It seems that thereafter there was progressive redemption of the export obligation by the petitioner and that ultimately, as evidenced by Ext.P7, the Joint Director General of Foreign Trade intimated the petitioner that they have confirmed the petitioner having completed the export obligation W.P.(C).No.28880 of 2008 :: 2 :: imposed under the EPCG licence dated 24.10.2002. Petitioner was therefore advised to approach the Customs Authorities for redemption of the Bank Guarantee which he had furnished at the time of import of the car as a condition precedent for effecting the import. 3. The petitioner did so as evidenced by Ext.P8 and P9, which was met with a reply stating that the vehicle in question was imported through the Cochin Port; that the office of the Commissioner Customs Cochin is conducting an inquiry into the import. A summons under Section 108 of the Customs Act, 1962 was also issued along with Ext.P10. 4. Petitioner complains about the delay in the completion of investigation by the Customs Authorities and also seeks release of the Bank Guarantee, which was furnished in 2002. Petitioner also challenges the jurisdiction of the Customs Authorities to initiate proceedings contending that irregularity if any in the matter of fulfillment of export obligations can, if at all, be W.P.(C).No.28880 of 2008 :: 3 :: investigated only by the Director General of Foreign Trade and not by the Customs Authorities. 5. A Counter affidavit has been filed by the respondents supporting the action taken. 6. I heard Mr.P.A.Augustian learned counsel for the petitioner and Mr.P. Gopinatha Menon learned counsel for the Department. 7. The question, as to whether the Customs Authorities have the jurisdiction to conduct an investigation into the alleged violation of the conditions contained in the EPGG Scheme in the matter of import of capital goods, is not a matter which need be decided by this court at this stage. The petitioner has appeared before the Customs Authorities and according to it, it had challenged the jurisdiction of the Customs Authorities. The Customs Authorities shall deal with such objections also before deciding the issue of any show cause notice under the Customs Act. I need only refer to the judgment of the Delhi High Court in W.P. W.P.(C).No.28880 of 2008 :: 4 :: (C)No.23162/05 which declined to interfere with the investigation launched by the Customs Authorities on an allegation regarding improper import of luxury cars and the alleged misuse of EPGG licence. But the investigation undertaken by the Customs Authorities cannot be interminably delayed. It must be completed within a time frame. In the result, the writ petition is disposed of directing the Assistant Commissioner, City Intelligence Unit (CIU), Cochin (who is suo motu impleaded as the additional 4 th respondent) to complete the investigation referred to in Ext.R1(a) within a period of six months from the date of receipt of a copy of this judgment. On completion of the investigation, if there are materials and if otherwise competent, a show cause notice may be issued alleging specific infraction of any provisions of the Customs Act. If there are inadequate materials to issue a show cause notice at the end of the six months' period, the Bank Guarantee furnished by the petitioner for the purpose for effecting import of cars, as W.P.(C).No.28880 of 2008 :: 5 :: evidenced by Ext.P6, shall be released to the petitioner. The petitioner shall co-operate with the investigation unit of the Customs Authorities. Sd/- V.GIRI) JUDGE sk/ //true copy//