Disposed

M/S Kerala Communicators Cable Ltd. v. Union of India

Kerala HC14 Oct 2016WP(C)/26676/2016

Case brief

AI extract

What is this about?

The Kerala High Court disposed of a writ petition by holding that no arrest or detention of officials can occur without notice and contrary to law. The Court ruled that undertakings given to authorities cannot be used to decide valuation disputes and investigation must proceed according to statute.

What did the court decide?

No arrest or detention without notice permitted; undertakings unusable for adjudicating valuation issues; investigation must proceed according to law.

M/S Kerala Communicators Cable Ltd. Vs Union of India — Customs and Excise | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN

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FRIDAY, THE 14TH DAY OF OCTOBER 2016/22ND ASWINA, 1938

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WP(C).No. 26676 of 2016 (H)

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PETITIONERS:

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1. M/S KERALA COMMUNICATORS CABLE LTD CC 28/491, GIRI NAGAR, KADAVANTHARA, KOCHI-682020, REPRESENTED BY ITS CHAIRMAN, MR. ABOOBACKER SIDHIQUE M.

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2. MR. SURESH KUMAR P.P. EXECUTIVE DIRECTOR, M/S. KERALA COMMUNICATORS CABLE LTD., CC 28/491, GIRI NAGAR, KADAVANTHARA, KOCHI-682 020.

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BY ADVS.SRI.M.GOPIKRISHNAN NAMBIAR

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SRI.P.GOPINATH SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.RAJA KANNAN

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RESPONDENTS:

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1. UNION OF INDIA REPRESENTED BY SECRETARY TO REVENUE DEPARTMENT, MINISTRY OF FINANCE, NEW DELHI-110 001.

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2. THE DEPUTY DIRECTOR (CI CELL) DIRECTORATE OF REVENUE INTELLIGENCE, MUMBAI ZONAL UNIT, 3RD AND 4TH FLOOR, 12, SIR VITHALDAS THACKERSEY MARG, MARINE LINES, MUMBAI-400 020.

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R2 BY ADV. SREELAL N. WARRIER, SC, CENTRAL BOARD OF EXCISE & CUSTOM

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 14-10-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 26676 of 2016 (H)

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APPENDIX

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PETITIONER(S)' EXHIBITS

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P1: A TRUE COPY OF THE LETTER AND SUMMONS DATED 26.7.2016 ISSUED BY THE 2ND RESPONDENT.

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P2: A TRUE COPY OF THE LETTER DATED 29.7.2016, PROOF OF DESPATCH OF THE SAME BY REGISTERED POST AND THE TRACKING DETAILS.

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RESPONDENT(S)' EXHIBITS

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R2(A) A TRUE COPY OF E-MAIL DATED 23.06.2016 ALONG WITH THE ATTACHMENTS

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R2(B) A TRUE COPY OF DETAILS OF INVOICES FROM CONAX AS, NORWAY

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R2(C) A TRUE COPY OF DETAILS OF INVOICES FROM NAGRAVISION SA, SWITZERLAND

//TRUE COPY//

P.A.TO JUDGE

JJJ

K. VINOD CHANDRAN, J.

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W.P.(C) No. 26676 of 2016 (H)

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Dated: 14^th October, 2016

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J U D G M E N T

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The petitioner is a Cable T.V. Service Operator,

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who has approached this Court, in the midst of an investigation initiated by the 2^nd respondent, alleging illegal detention and threat of arrest, based on which, statements were allegedly obtained from the officers of the petitioner, undertaking payment of amounts, which are yet to be adjudicated.

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The issue revolves around the valuation to be

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made for the purpose of clearing the Set-up Boxes imported from foreign countries. The petitioner is a Cable T.V. Operator who rents out such Set-up Boxes to

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its consumers, to enable transmission of various channels to the consumers' television-sets. The

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W.P.(C) No. 26676/2016

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petitioner, in the process of such renting out, also installs a software, purchased again from a foreign country, in the Set-up Boxes, so as to restrict the channels transmitted to the individual consumer's television set, enabling the petitioner to take monthly subscriptions from the consumers for the pay channels. The question involved is as to whether the price of the software has to be included in the valuation of the Set-up Box, at the time of declaration of valuation of the Set-up Boxes imported.

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The petitioner contends that the software, is purchased separately and installed only after the release of goods from the customs frontiers. The value of the software cannot be included in the valuation of the Set-up Boxes; for release, by the customs authorities. The 2^nd respondent, however, takes a stand that the software would be a value addition, which also

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W.P.(C) No. 26676/2016

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is imported and the imports made separately would be taken in as per the provisions of Section 14 of the Customs Act, 1962, ('Act' for short) and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and other Rules. As of now, this Court need not go into the core issue of the valuation since investigation is said to be pending and there is no warrant for preempting the original authority, who has to decide the issue at the first instance.

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The petitioner has approached this Court contending that when the petitioner's Director appeared, on the basis of the summons issued on 26.07.2016, he was detained till the night of the said day and certain undertakings were taken from him, which goes against the consistent stand taken by the petitioner with respect to the valuation. The petitioner also apprehends detention and arrest on the basis of the

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W.P.(C) No. 26676/2016

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said undertaking; forcefully taken from the Director.

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The learned Standing Counsel appearing for

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the Department, however, points to an e-mail sent by the petitioner on 15^th June, 2016, extracted in the counter affidavit, in which allegedly there was an admission that the entire duty charges would be paid, provided instalments are granted. A reading of the e-mail, as extracted, cannot be taken as an admission of the method of valuation, as intended by the Department. A prayer for installment or a promise made to pay the amounts demanded cannot absolve statutory authorities from adjudicating the legal issue raised as per the provisions of the enactment.

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It is also pertinent that, after the e-mail, the petitioner had approached this Court with a writ petition seeking release of the goods detained, for reason of the valuation having not been finalised. The

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W.P.(C) No. 26676/2016

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writ petition, filed as W.P.(C) No.23106/2016, was disposed of by judgment dated 26.07.2016. This Court took note of Section 18 of the Act and found that it empowers the officers of the Department to direct a provisional assessment of the value of the goods imported and permits release of the same, if the importer furnishes such security to the officer's satisfaction for payment of the deficiency. The goods are also said to have been released on the basis of the judgment, after the petitioner furnished the security to the satisfaction of the officer. The present writ petition is filed apprehending arrest and detention, which, however, is not permitted by the Act, in the course of the valuation proceedings.

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The learned Standing Counsel for the Department also submits that there is an investigation pending against the petitioner and no steps would be

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taken, which is not permitted under the statute. The petitioner also has a prayer that the statements taken from the Director of the petitioner on 28.07.2016 has not been supplied to them. The learned Standing Counsel for the Department contends that all the statements would be supplied when the Show Cause notice is issued.

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In the context of the investigation having been initiated, it is not proper for this Court to stay the further proceedings and, in any event, the interim order sought for is not to arrest the Directors or other responsible officers of the 1^st petitioner Company and not to compel them to give any evidence against themselves. This, definitely, is a principle of law which need not be reduced to a direction by this Court and there is nothing on record, as of now, to indicate that the respondent Department would proceed against the

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W.P.(C) No. 26676/2016

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petitioner otherwise than in accordance with law. The respondent is permitted to proceed with the investigation in accordance with law and the petitioner also shall co-operate with such investigation.

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The writ petition would stand disposed of, making it clear that no arrest or detention of the 2^nd petitioner or other Directors or officers, who appear before the Authority under the Act, shall be made otherwise than in accordance with law, and without notice. It is also made clear that any undertaking made by the representative of the petitioner shall not be used against them in so far as deciding the legal issue which has to be adjudicated on the basis of the relevant facts and the law on the subject. No Costs.

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Sd/K.VINOD CHANDRAN, JUDGE

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jjj 14/10/16

M/S Kerala Communicators Cable Ltd. v. Union of India

Case brief

What is this about?

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M/S Kerala Communicators Cable Ltd. v. Union of India

Case brief

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