IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN WEDNESDAY, THE 25TH NOVEMBER 2009 / 4TH AGRAHAYANA 1931 WP(C).No. 3631 of 2006(G) ------------------------------------- PETITIONER: ------------------- THE GENERAL SECRETARY, MARKAZU SSAQUAFATHI SSUNNIYYA, P.O. KARANTHUR, CALICUT, KERALA-673 571. BY ADV. SMT.I.SHEELA DEVI. RESPONDENTS: ------------------------ 1. THE SECRETARY, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI-110 001. 2. THE JOINT SECRETARY (CUSTOMS), DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI-110 001. 3. THE COMMISSIONER OF CUSTOMS, WELLINGTON ISLAND, KOCHI. R1 TO R3 BY MR.P.PARAMESWARAN NAIR,ASST.S.G, MR. P.S. BIJU, A.C.G.S.C. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C). NO.3631/2006-G: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE CERTIFICATE OF REGISTRATION OF SOCIETIES. EXT.P.2: COPY OF THE ADHOC EXEMPTION ORDER NO.104 DTD. 28/10/1997. EXT.P.3: COPY OF THE OFFICE MEMORANDUM CIRCULAR NO.49/03 DTD. 10/06/2003. EXT.P.4: COPY OF THE COMMUNICATION DTD. 22/10/2005. EXT.P.5: COPY OF THE REQUEST LETTER DTD. 24/10/2005. EXT.P.6: COPY OF THE CERTIFICATE DTD. 28/12/05. EXT.P.7: COPY OF THE COMMUNICATION F.NO.460/74/05 CUS.V. DTD. 21/12/2005. EXT.P.8: COPY OF THE COMMUNICATION F.NO.460/74/05-CUS.V. DTD. 03/02/2006. RESPONDENTS' EXHIBITS: NIL. //TRUE COPY// P.A. TO JUDGE. Prv. P.N.RAVINDRAN, J. --------------------------- W.P.(C) No. 3631 OF 2006 -------------------------- Dated this the 25th day of November, 2009 J U D G M E N T The petitioner is the General Secretary of Markazu Ssaquafathi Ssunniyya, a society registered under the Societies Registration Act, 1860. It has established and is running educational institutions, hospitals and orphanages. 2. Mr. Rashid M. Al Mazroui, a foreigner donated a brand new Toyota Land Cruiser to the petitioner's society. The said vehicle arrived at Cochin Port accompanied by a bill of lading dated 18.3.2006. Even before the vehicle was shipped to India, the petitioner submitted Ext.P5 request to the Joint Secretary, (Customs) Department of Revenue, Ministry of Finance, New Delhi, seeking exemption from payment of customs duty under section 25(2) of the Customs Act, 1962. Along with the application the audited balance sheet, income and expenditure statement etc., were forwarded. Along with the application for exemption, the petitioner did not forward a certificate in terms of para 4(e) of Ext.P3 guidelines. The Government of India thereupon sent a letter to the petitioner calling upon him to produce the said certificate. The certificate evidenced by Ext.P6 was thereupon forwarded to the Government of India. By Ext.P8 letter dated 3.2.2006, the Government of India informed the petitioner that his application for exemption from payment of customs duty has been W.P.(C) No. 3631/06 2 rejected. Ext.P8 is under challenge in this writ petition. 3. The petitioner contends that as the petitioner satisfies the eligibility requirements set out in Ext.P3 guidelines, the Government of India erred in not granting exemption from payment of customs duty. It is contended that the petitioner's society is a charitable organisation which runs orphanages, educational institutions and hospitals for the welfare and upliftment of the poor and the down trodden, irrespective of their caste and creed. It is stated that as the petitioner has produced all the documents referred to in Ext.P3 guidelines the Government of India erred in rejecting the petitioner’s application for exemption from payment of customs duty. 4. A statement dated 7.9.2009 has been filed by the learned standing counsel appearing for the respondents. Paras 3 and 4 thereof read as follows: “3. The contention of the petitioner that the impugned order was issued in violation of principles of Natural Justice cannot be sustained in the facts and circumstances of the case. The imported item is a high and lifestyle luxury vehicle and does not appear to be an item meant for charitable purposes. Circular No.49/2003 - Customs dated June 10, 2003 prescribes guidelines to be followed for grant of exemption of duty under Section 25(2) of the Customs Act, 1962 under circumstances of exceptional nature and for public interest. The circular covers goods that are strategic, secret, charitable, goods meant for defence, research for the country, or goods imported under exceptional circumstances. Further, the aforesaid Circular deals with two aspects. (a) It prescribes procedure for ascertaining the antecedents for charitable organisations by requiring W.P.(C) No. 3631/06 3 submission of relevant certificates from revenue or other governmental authorities and balance sheet income-expenditure statements (para 49 of the Circular reefers). In case of government departments, if mandates availability of budgetary provisions with respect to customs duty for the equipments being imported (para 3 of the Circular refers). (b) It tries to ensure the end use of the goods being imported by insisting on undertakings from the applicant institutions so that the goods are used for the same purpose for which they are imported and not used or any other purpose. In this case the society did submit documents such as balance sheets, certificates etc. However the item being imported ie. Toyota Land Cruiser car, did not appear to be an item meant for charitable purpose. According to the applicant the vehicle was to be used to take orphans and destitute students to hospital and pick up those that are far and from various locations. The item was a motor car capable of being used for general purposes of transport other than those mentioned in the request. Imposition of any condition/restriction on the end use of the car in the exemption order would have proved infructuous, as verification of such use would be practically infeasible. Thus, in this case, the Toyota case was not considered eligible for exemption from duty. 4. The earlier exemption Order No.104 of 1997 dated October 28,1997 pertained to exemption from payment of customs duty on import of a donated jeep by the institution. The Jeep was to be equipped as an ambulance and this was to be printed on the vehicle and was to be used for carrying the orphans to the hospital and for conducting remote rural medical camps providing free service to the members of the public. The end use of the vehicle was ascertainable as that of an ambulance. In the present case, the nature of the item was not clearly ascertainable as chartable. The petitioners' status as a charitable organization has not been disputed.” . W.P.(C) No. 3631/06 4 5. The petitioner does not dispute the fact that Toyota Land Cruiser is a luxury vehicle. The case of the petitioner is that the said vehicle will be used to take orphans and destitute students to hospitals. The respondents have in the statement averred in categorical terms that the motor car imported is not a vehicle which is used for the purpose mentioned in Ext.P5 application and that it is a luxury vehicle intended purely for private use. It is stated that as the vehicle donated to the petitioner's organization is a luxury vehicle the end use cannot be easily ascertained as in the case of an Ambulance and vehicles used for mass transport. The respondents also contend that the power to grant exemption from payment of customs duty is discretionary in nature and that the petitioner has no fundamental or statutory right to claim exemption. 6. I have considered the submissions made at the Bar by the learned counsel appearing on either side. On going through the pleadings, especially the statement filed by the respondents and the grounds put forwarded in Ext.P5 application for grant of exemption, I am satisfied that the petitioner has not made out a case warranting interference in exercise of the jurisdiction vested in this Court under Article 226 of the Constitution of India. Toyota Land Cruiser is admittedly a luxury vehicle. It is not one commonly used to transport destitutes and orphans to hospitals. If as claimed by the petitioner it is running a larger number of orphanages, W.P.(C) No. 3631/06 5 hospitals and educational institutions it would have been more appropriate to use a larger vehicle like a bus or a van. Toyota Land Cruiser has only a limited seating capacity. It is a luxury vehicle and as stated by the respondents, the end use of such a luxury vehicle cannot easily be ascertained. I am therefore persuaded to hold that the petitioner has not succeeded in establishing that the vehicle donated by the foreigner is one meant to be used exclusively for charitable purposes. Further, the petitioner does not have a statutory or fundamental right to claim exemption from payment of customs duty. Grant of exemption from customs duty is a discretionary power vested in the Government of India. The said power is to be exercised in larger public interest. On the facts disclosed in the pleadings, it cannot be said that the luxury car gifted to the petitioner's society should have been exempted from payment of customs duty and that such grant of exemption is in public interest. This Court had by order passed on 2.3.2006 permitted the petitioner to get the vehicle released on furnishing bank guarantee for the amount demanded as customs duty and other charges. Pursuant to the said order, the petitioner obtained release of the vehicle. In the view that I have taken, the petitioner will necessarily have to pay the customs duty and other charges. For the reasons stated above, I hold that there is no merit in the writ petition. The writ petition fails and is dismissed. It will be open to the W.P.(C) No. 3631/06 6 respondents to invoke the bank guarantee furnished by the petitioner for realising the customs duty and other charges payable in respect of the vehicle. P.N.RAVINDRAN, JUDGE vps