2023 (11) TMI 74 - HC - Customs

Provisional release of confiscated fresh apples ordered upon bank guarantee pending challenge to minimum CIF value notification

The HC ordered provisional release of confiscated fresh apples imported below minimum CIF value of Rs. 50/- per kg, following SC precedent in Delhi ... Interim stay having pan-India effect - operation of administrative notification stayed pending adjudication - provisional release of perishable goods on furnishing bank guarantee - availability of alternative remedy under Section 128 not an absolute bar to writ relief - principles of natural justice in interim ordersInterim stay having pan-India effect - operation of administrative notification stayed pending adjudication - Effect of interim stay orders against DGFT Notification No.5/2023 and its consequence for confiscation of imported apples - HELD THAT: - The Court held that interim stay orders granted by other High Courts in respect of Notification No.5/2023 operate beyond territorial limits and that the stay of the notification was in force at the relevant time. Having regard to the stay granted in WP(C) No.22281 of 2023 by the Kerala High Court and subsequent interim stays in related matters, the confiscation order based on the notification lacked legal sanctity while the stay subsisted. The court relied upon established precedents recognising that a writ order addressing the validity or operation of an enactment or notification will have effect throughout India subject to territorial applicability considerations, and concluded that the stay on the notification justified interfering with the confiscation, at least provisionally, pending final adjudication. [Paras 11, 12]The confiscation based on Notification No.5/2023 could not be sustained while the notification was stayed; release of the goods was appropriate subject to conditions to safeguard the Department's interest.Provisional release of perishable goods on furnishing bank guarantee - principles of natural justice in interim orders - Whether perishable imported apples should be provisionally released and on what terms - HELD THAT: - The Court considered the perishable nature of the goods and precedent of the Supreme Court allowing provisional release of goods in similar circumstances. Weighing the competing interests, the Court directed provisional release of the imported fresh apples on the condition that the respondent furnish a bank guarantee for the differential duty, to preserve departmental interests while avoiding loss of perishable consignments. The Court modified the earlier interim direction by specifying the security to be furnished and by keeping the guarantee alive until the validity of the notification is finally determined. The Court also declined the contention that the interim order violated natural justice on the facts, given the urgency and the existence of stays on the notification. [Paras 12, 14]Goods to be released provisionally upon respondent furnishing a bank guarantee for the differential duty; guarantee to remain until final determination of the notification's validity.Availability of alternative remedy under Section 128 not an absolute bar to writ relief - Whether availability of appeal under Section 128 of the Customs Act precluded grant of interim writ relief - HELD THAT: - The Court rejected the appellant's submission that the existence of an appellate remedy under Section 128 precluded the writ court from granting interim relief. The Court observed that interim relief was directed in the backdrop of stay orders against the notification and the perishable nature of the goods; accordingly, the existence of an alternative remedy did not operate as an automatic bar to provisional relief in the circumstances of the case. [Paras 5, 11]Availability of appeal under Section 128 did not preclude grant of interim relief releasing the goods on terms in the present facts.Final Conclusion: The appellate challenge is disposed by modifying the interim order: the confiscation could not be sustained while Notification No.5/2023 was stayed, and the perishable imported apples are to be provisionally released subject to a bank guarantee for the differential duty (directed at Rs.2,25,000), the guarantee to remain until final adjudication of the notification; writ appeal disposed with no costs. Issues Involved:1. Validity of Notification No.5/2023 dated 08.05.2023.2. Confiscation of imported fresh apples under section 111(d) of the Customs Act, 1962.3. Interim relief and principles of natural justice.Summary:1. Validity of Notification No.5/2023 dated 08.05.2023:The respondent imported 'fresh apples' from New Zealand, which were classified into two categories based on CIF price, with some being below Rs. 50/- per kg. According to DGFT Notification No.5/2023, apples with CIF value below Rs. 50/- per kg are 'prohibited' from import. The Kerala High Court and Madras High Court had both granted interim stays against this notification, impacting its enforceability.2. Confiscation of Imported Fresh Apples:The appellant authority confiscated the apples with CIF value below Rs. 50/- per kg under section 111(d) of the Customs Act, 1962, while allowing the clearance of apples with CIF value above Rs. 50/- per kg. The respondent challenged this confiscation in W.P.No. 24343 of 2023, seeking the release of the goods and a waiver of demurrage and container detention charges.3. Interim Relief and Principles of Natural Justice:The learned Judge granted an interim direction to release the goods, citing the perishable nature of the apples and the existing stays on the notification by the Kerala High Court and Madras High Court. The appellant contended that the interim order was issued without notice and violated principles of natural justice. The court noted that the stay orders on the notification had pan-India effect and that the confiscation order lacked legal sanctity due to these stays.Final Ruling:The court ordered the release of the apples upon the respondent furnishing a bank guarantee for the differential duty amount of Rs. 2,25,000/-. This interim arrangement was made to safeguard the interests of both parties, pending the final decision on the validity of Notification No.5/2023. The writ appeal was disposed of with these directions, and the connected miscellaneous petition was closed.