1990 (1) TMI 73 - SC - Customs

Supreme Court Upholds Confiscation of Industrial Coconut Oil as Canalised Item

JAIN EXPORTS PVT. LTD. Versus UNION OF INDIA

The Supreme Court affirmed the High Court's decision that industrial coconut oil falls under the expression 'coconut oil,' upholding its confiscation as a ... Whether 'industrial coconut oil' was included within the expression `coconut oil' and as such the same was canalised item, it could not be imported by the petitioners? Whether the Collector of Customs (Kandla) had jurisdiction to confiscate the goods and to release the same to the petitioners by imposing redemption fine? Held that:- Tribunal failed to consider the question of bona fide in proper perspective. The High Court and this Court had requested the extenuating circumstances in determining the legality of the import, but nonetheless those factors and circumstances are relevant in determining the quantum of redemption fine. The Appellate Tribunal was bound to consider those facts and circumstances in determining the quantum of redemption fine. Moreso, because the Tribunal had itself observed that the Collector's order imposing redemption fine of Rupees five crores was not based on any material, but it refused to consider the reduction of redemption fine merely on the ground that the importers had failed to place additional material other than those which had already been considered by the High Court and the Supreme Court while determining the legality of the import. In our opinion the Tribunal committed apparent error in refusing to take into account the extenuating circumstances leading to the import of the disputed goods for purposes of determining the quantum of redemption fine. Allow the writ petition and remand the matter to the Appellate Tribunal to determine the question of quantum of redemption fine. Issues:1. Confiscation and redemption fine imposed on imported industrial coconut oil.2. Interpretation of whether industrial coconut oil falls under canalised item.3. Jurisdiction of Collector of Customs to confiscate goods.4. Question of quantum of redemption fine.5. Consideration of extenuating circumstances in determining redemption fine.6. Relevance of bona fide conduct of importer in determining redemption fine.Analysis:1. The petitioners imported industrial coconut oil under a license but faced confiscation and a redemption fine of Rupees five crores imposed by the Collector of Customs (Kandla Port) based on the assumption that the imported good was a canalised item. The High Court held that industrial coconut oil falls under the expression 'coconut oil' and upheld the confiscation. The Supreme Court affirmed this decision.2. The Supreme Court observed that the Collector had jurisdiction to confiscate the goods and impose the redemption fine. The Court affirmed the High Court's decision that industrial coconut oil was a canalised item, preventing its importation by the petitioners.3. The question of the quantum of redemption fine was directed to be considered by the Appellate Tribunal. The Tribunal initially dismissed the appeal challenging the redemption fine. The Tribunal's decision was based on the lack of material supporting either the fines imposed by the Collector or the importers' plea for reduction.4. The petitioners argued that extenuating circumstances, such as their bona fide belief in the legality of the import based on various factors, should be considered in determining the redemption fine. The Tribunal, however, refused to consider these circumstances, stating that they had already been rejected by the courts in determining the import's legality.5. The Supreme Court emphasized the importance of considering the importer's bona fide conduct in determining the redemption fine. It noted that extenuating circumstances should be taken into account for this purpose, even if they had been considered in determining the import's legality.6. The Court rejected the petitioners' request to determine the redemption fine based on a percentage of the landing cost, stating that such determinations should be made by the statutory authorities. The Court set aside the Tribunal's order and remanded the matter for the Tribunal to determine the redemption fine in line with relevant legal decisions and observations.