High Court quashes Legal Metrology Act proceedings against duty-free shops at international airport for lack of territorial jurisdiction

The HC allowed the criminal revision and quashed proceedings under Legal Metrology Act, 2009 against petitioners operating duty-free shops at international airport. The court held that complainant lacked authority to initiate proceedings for alleged offences occurring in duty-free shops located beyond India's custom frontiers, as such areas are deemed outside Indian territory. Despite petitioners not exhausting alternative statutory remedies, the court decided on merits considering nine years had elapsed since initiation. The proceedings were found to be not in accordance with law and constituted abuse of court process, warranting quashing.

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Issues Involved:
1. Quashing of the proceeding in Case No. C-163 of 2016.
2. Jurisdiction and authority of the complainant.
3. Applicability of the Legal Metrology Act, 2009 to duty-free shops.
4. Compliance with Legal Metrology (Packaged Commodities) Rules, 2011.
5. Role of customs authorities in duty-free shops.

Summary:

Issue 1: Quashing of the proceeding in Case No. C-163 of 2016
The petitioners sought the quashing of the proceeding in Case No. C-163 of 2016 u/s 36(1) of the Legal Metrology Act, 2009 read with Rule 32(3) of the Legal Metrology (Packaged Commodities) Rules, 2011. The High Court quashed the proceedings, stating that the complainant did not have the authority to initiate the proceedings as the alleged offences took place in a duty-free shop at an international airport, which is beyond/outside the customs frontiers of India.

Issue 2: Jurisdiction and authority of the complainant
The court found that the complainant, an Inspector of Legal Metrology, lacked the jurisdiction to initiate proceedings against the petitioners. The proceedings were deemed not in accordance with the law and an abuse of the process of court/law.

Issue 3: Applicability of the Legal Metrology Act, 2009 to duty-free shops
The court held that the Legal Metrology Act, 2009, which extends to the whole of India, does not apply to goods sold in duty-free shops at international airports, as these shops are deemed to be outside the customs frontiers of India. This conclusion was supported by the Supreme Court's decision in Hotel Ashoka (Indian Tour. Dev. Cor. Ltd.) vs Assistant Commissioner of Commercial Taxes and Ors.

Issue 4: Compliance with Legal Metrology (Packaged Commodities) Rules, 2011
The petitioners argued that the goods sold at duty-free shops do not qualify as imports for home consumption and are for export purposes only. They stated that the packaging of goods is done by foreign manufacturers/packers, and it is not possible to change the packaging to comply with the Legal Metrology (Packaged Commodities) Rules, 2011. The court noted that the offences alleged, such as the lack of details on the packages, are serious and have an adverse effect on consumers.

Issue 5: Role of customs authorities in duty-free shops
The court highlighted that duty-free shops are under the supervision of customs authorities, and the appropriate authorities are not carrying out their duties diligently, leading to non-compliance with rules. The court directed that a copy of the judgment be sent to the Commissioner of Customs, Kolkata, and the Commissioner, Central Board of Excise and Customs, Ministry of Finance, Department of Revenue, New Delhi, for necessary action.

Conclusion:
The proceedings in Case No. C-163 of 2016 were quashed due to the lack of jurisdiction of the complainant. The court emphasized the importance of compliance with legal requirements for the safety of consumers and directed the customs authorities to take necessary action.

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