2003 (7) TMI 92 - HC - Customs

High Court rules in favor of Petitioners challenging Customs Act order, citing defense-related manufacturing importance.

The High Court of Judicature at Bombay ruled in favor of the Petitioners in a case challenging the order-in-original for confiscation of imported goods ... EXIM - OGL Issues:Challenge to order-in-original for confiscation of imported goods under Section 111(d) of the Customs Act, with option for redemption fine and penalty.Analysis:In the judgment delivered by the High Court of Judicature at Bombay, the challenge was to the order-in-original passed by the Additional Collector of Customs, Bombay, confiscating goods imported by the Petitioners under Section 111(d) of the Customs Act, with the option to redeem the goods on payment of a fine and penalty. The case involved the import of 'NIKON EPIPHOT-TME Inverted Metallurgical Microscopes' by the Petitioners on behalf of a Government of India Enterprise engaged in the manufacture of weapons with semi-conductor devices. The dispute arose as the Additional Collector of Customs contended that the imported microscopes required a specific license under the Import Policy, which was not obtained by the Petitioners. The Petitioners argued that the microscopes were essential for the manufacture of weapons with semi-conductor devices and fell under the relevant policy provisions.The Petitioners, represented by Mr. Shah, argued that the imported microscopes were crucial for the Government of India Enterprise's defense-related manufacturing activities. They provided certificates from the Enterprise and independent authorities supporting the use of the microscopes for semi-conductor device manufacturing. It was contended that the microscopes fell under the policy provisions allowing their import as OGL items. Mr. Shah highlighted that the goods were eventually supplied to the Enterprise, reinforcing their intended purpose for defense-related manufacturing.On the other hand, Mr. Mehta, representing the Respondents, contended that the microscopes did not qualify as OGL Capital Goods under the relevant policy provisions. He raised doubts about the authenticity of the certificates provided by the Petitioners and argued that there was insufficient evidence to prove the necessity of the imported goods for the Enterprise. Mr. Mehta supported the decision of the Additional Collector of Customs and opposed any interference through writ jurisdiction.After hearing arguments from both sides, the Court found multiple reasons to rule in favor of the Petitioners. Firstly, the Enterprise's admission in a certificate supported the essential nature of the imported microscopes for defense-related manufacturing. Secondly, certificates from reputable authorities had not been disproved, indicating the microscopes' relevance for semi-conductor device production. Thirdly, the relevant policy provision did not mandate exclusive use for semi-conductors, supporting the import of the microscopes as OGL items. The Court concluded that the confiscation order by the Additional Collector of Customs was unsustainable based on the evidence presented.Consequently, the Court allowed the petition, quashed the impugned order of confiscation, and set aside the penalty. The ruling was made absolute in favor of the Petitioners, with no costs imposed due to the circumstances of the case.