TaxTMI 
TaxTMI 
2021 (6) TMI 778
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....................31 The order dated 15.10.2020 and its modification dated 09.12.2020: The High Court issues mandamus for release of goods....................................39 Orders dated 24.12.2020 by the Appellate Authority: Orders-in-original set aside with enhancement of penalty.............................................................48 Another round in High Court: Challenge to the order-in-appeal dated 24.12.2020 and stay order by the High Court dated 05.01.2021................56 Rival submissions........................................................................................59 Points for determination...............................................................................77 Legality and validity of the orders passed by the High Court......................78 Whether the goods in question are of 'prohibited goods' category?...........90 Whether the goods in question are liable to absolute confiscation?...........99 Invocation of equity by the importers.........................................................115 Prayer for keeping issues open fo....
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....sed; and the importers again proceeded to effect various imports under the cover of such interim orders. 3.2. Faced with such challenges and interim orders in different High Courts, the Union of India filed various transfer petitions, seeking transfer of the cases relating to the same subject-matter to this Court. Having regard to the nature of controversy and surrounding factors, this Court heard the matters on merits so as to finally deal with the challenge to the notifications and the trade notice in question. This led to the judgment dated 26.08.2020 by this Court in the case of Union of India and Ors. v. Agricas LLP and Ors.4 upholding such notifications dated 29.03.2019, issued by the Central Government as also the consequential trade notice dated 16.04.2019, issued by the DGFT. 3.3. In the said judgment dated 26.08.2020, this Court, apart from other findings, held that the importers cannot be said to be under any bona fide belief in effecting the imports under the cover of interim orders; and they would face the consequences in law. While dismissing the writ petitions, this Court held that the imports made while relying on the interim orders were contrary to the said n....
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....cision in appeals, the High Court heard the said writ petitions of the importers on 06.10.2020 and proceeded to decide the same by the common order dated 15.10.2020. 5.1. In its order dated 15.10.2020, the High Court took the view that, prima facie, the grounds stated in the order dated 01.10.2020 did not make out any such case of illegality or impropriety as to call for exercise of suo motu revisional powers by the Commissioner Under Section 129D(2) of the Customs Act. Having said that, the High Court left the matter to be decided by the Commissioner (Appeals). However, thereafter, the High Court proceeded to examine the question as to the justification or otherwise for not releasing the goods in question. In this regard, the High Court was of the view that when the orders-in-original were holding the field and the importers had complied with the terms and conditions thereof; and where the importers were incurring expenditure because of warehousing, any further withholding of the imported goods was not justified. Thus, the High Court issued directions to the Respondents to forthwith release the goods of the importers covered by the bills of entry mentioned in paragraph 38 of th....
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....suing notice, this Court stayed the operation of the order impugned. Later on, these matters were taken up for hearing in priority looking to the nature of controversy and the goods involved. During the course of hearing, on 18.03.2021, this Court found no reason for continuation of contempt proceedings in the High Court and closed the same. On 18.03.2021, yet another observation was made by this Court with reference to the submission of learned ASG appearing for the Appellants, that it was open to the private Respondents to opt for re-export of perishable imported goods lying in the customs warehouse to outside India. 8. The outline foregoing makes it clear that in the case of Agricas (supra), while deciding on the validity of the notifications and the trade notice, this Court did not accept that the imports in question, as made on the basis or under the cover of the interim orders passed by the High Courts, could be regarded as bona fide; but, in the given circumstances and the issues raised, this Court left those goods to be dealt with under the Customs Act. Now, dealing of the goods in question under the Customs Act has given rise to this litigation. On one hand, the Appella....
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....g Respondents 11. The two importers, in whose relation the impugned orders have been passed by the authorities concerned and the High Court are the contesting Respondents of these appeals. Their relevant particulars are as under: 11.1. M/s. Raj Grow Impex LLP This importer is said to be a partnership firm having its registered office at Jaipur in the State of Rajasthan. This firm had filed ten bills of entry dated 01.11.2019 for clearance of 24,815 MTs of yellow peas, said to have been imported under the cover of interim order dated 20.07.2019, as passed by the Rajasthan High Court, Bench at Jaipur in WP No. 11974 of 2019. Its efforts to get the goods released with payment of fine led to the order-in-original dated 28.08.2020. This importer had obtained OOC for three bills of entry and got released 7,500 MTs of the goods in question but the remaining were not released. This importer had filed WP (L) No. 3502 of 2020 before the High Court of Judicature at Bombay seeking mandamus which was decided by the common order dated 15.10.2020. This importer has also filed WP (ST) No. 24 of 2021 questioning the order-in-appeal dated 24.12.2020 wherein, the High Court of Judicature at ....
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....6 MTs of goods got released but not the remaining. It is stated by this importer that pursuant to the show cause notice dated 05.10.2020, the Commissioner of Customs, Nhava Sheva found the goods to be prohibited and liable to confiscation whereafter it had filed a writ petition bearing No. 525 of 2021 before the High Court of Judicature at Bombay against the non-clearance of the goods but in the meantime, the main issue has been taken up by this Court in these appeals. Relevant factual aspects and background 13. Having taken note of the salient features of the case, the relevant particulars of the parties before us with their respective interests, we may now enter into the relevant factual aspects and background in necessary details but while avoiding the facts which may not have bearing on determination of the real issues involved. 14. The relevant background aspects of the matter are that the Central Government had issued notifications dated 05.08.2017 and 21.08.2017, revising the policy for import of urad/moong and pigeon peas/toor dal from "free" to "restricted" with a stipulation as to annual quota and requirement of a prior licence from DGFT. Then, by the notificatio....
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.... power Under Section 3 of the FTDR Act read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy 2015-2020, amended the import policy conditions relating to various items of Chapter 7 of the Indian Trade Classifications (Harmonized System) 2017, Schedule I by way of S.O. Nos. 1478(E) :, 1479(E) :, 1480(E) : and 1481(E) dated 29.03.2019. These were followed by the trade notice dated 16.04.2019 by the DGFT. These notifications are at the core of controversy involved in these matters and hence, it would be just and appropriate to reproduce the same as under: S.O. 1478(E) :.-In exercise of powers conferred by Section 3 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central Government hereby notifies the Import Policy of items of Chapter 7 of the Indian Trade Classification (Harmonized System), 2017, Schedule-1 (Import Policy), as under- Exim Code Item Description Existing Policy condition Revised Policy condition 0713 31 10 Beans of the S....
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....bsp; by Directorate General of Foreign Trade. 0713 90 10 Split 0713 90 90 Other 2. This notification shall come into force with effect from the 1st April, 2019. xxx xxx xxx S.O. 1480(E) :.-In exercise of powers conferred by Section 3 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central Government hereby notifies the Import Policy of items of Chapter 7 of the Indian Trade Classification (Harmonized System), 2017, Schedule-1 (Import Policy), as under- Exim Code Item Description Existing Policy condition Revised Policy condition 0713 31 90 0713 90 10 0713 90 90 Beans of the SPP Vigna Radiata (L.) Wilezek Split Other Restricted. Import of Urad shall be subject to an &nbs....
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....bsp; by Directorate General of Foreign Trade: Provided that this restriction shall not apply to Government's import commitments under any Bilateral or Regional Agreement or Memorandum of Understanding. 2. This notification shall come into force from the 1st April, 2019. 15.1. The trade notice dated 16.04.2019 issued by the DGFT laid down the modalities for making the applications for import of the commodities in question and carried the following amongst other stipulations: a. Applications are invited online from the intending millers/refiners (having own refining/processing capacity) of pulses/peas for its import as per ANF-2M of FTP 2015-20 to DGFT, at [email protected] besides the concerned jurisdictional Regional Authorities ..... 16. Seeking to challenge the said notifications dated 29.03.2019 and the trade notice dated 16.04.2019, about 90 writ petitions were filed before the Rajasthan High Court, Bench at Jaip....
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.... perfect substitute for Gram in making of Besan which is primarily used in preparation of Indian savouries. As the price of imported Yellow Peas in India is cheaper than the domestic price of Gram, a huge shift in industry usage from Gram to Yellow Peas has taken place. In these circumstances that the government has imposed restrictions from April, 2018 onwards with a small window of annual quota for permitted imports. However, in view of the interim orders passed by the various High Courts, the actual imports of peas were to the tune of 8,51,408 MT and 6,52,607 MTs in 2018-2019 and 2019-2020 respectively, though the annual quota for these two years was 1/1.50 lakh MTs. The Government is presently holding a buffer stock of 26.94 lakh MT of Gram, against the target quantity of 3 lakh MTs. The Gram is being sold at Rs. 4,000 - 4,200 per quintal, which is below the MSP of Rs. 4,875/- per quintal. Imported CIF value of Yellow Peas is Rs. 2,028/- per quintal. Due to the pandemic, the farmers could be compelled to make panic disposal at much lower prices. In the further affidavit filed on 1st July 2020, the Union of India has stated that they had not issued any quota for Peas, Yellow Pea....
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....t. The relevant finding in that regard may also be usefully noticed as follows: 17. We would also without any hesitation reject the contention raised by some of the importers that the impugned notification is illegal because of vagueness or allows restricted quantity of 1/1.5 lakh MT of Peas (Pisum Sativum) including Yellow Peas, Green Peas, Dun Peas and Kaspa Peas as against a licence, meaning thereby each licensee is allowed to import the maximum quantity specified in the notification. In other words, the total quantity specified in the notification is per licensee and not for the total imports of the commodity specified in the notification. The submission has no merit as the notification expressly uses the expression 'total quantity' of the commodity specified which could be imported. There is no ambiguity or vagueness in the notifications, relevant portions of which have been quoted above. Even otherwise the expression 'total quantity' cannot be construed as quantity per licence issued as the number of licences issued concerning the subject goods could be numerable (as per the Union of India 2248, 1016 and 2915 licences were issued in 2019-20 for import....
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....arious interim orders had been passed by the High Courts. It was stated before this Court that, relying upon such interim orders, the importers had imported various quantities of peas and pulses; and it was contended on behalf of the importers that those had been bona fide imports under the interim orders of the Courts. This Court specifically rejected such contentions and held that despite the High Courts of Madras, Bombay, Gujarat and Madhya Pradesh having dismissed the writ petitions of similar nature while upholding the notifications and trade notices, the importers took their chance, obviously for personal gains and they would, accordingly, face the consequences in law. This Court, in no uncertain terms, rejected the submissions that the importers had acted in bona fide belief. The relevant observations and findings of this Court in Agricas (supra) in this regard could be usefully extracted as under: D. Contention of the importers of bona fide imports under interim orders and prayer for partial relief. 65. Learned Counsel for some of the importers had placed reliance on Raj Prakash Chemical v. Union of India, which judgment, in our opinion, has no application....
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....rovisions of the Customs Act 1962. The Writ Petitions subject matter of the Transfer Petitions, subject to E above (What is not decided) are dismissed. Writ Petitions filed by the intervenors before the respective High Courts shall stand dismissed in terms of this decision. Pending application(s), if any, also stand disposed of in the above terms. No order as to costs. 20. Therefore, it is beyond a shadow of doubt that in Agricas (supra), this Court took note of raison d'être that the notifications were fundamentally intended to protect the domestic agriculture market and also pronounced on the true meaning and import of these notifications; and while rejecting the far-stretched interpretation suggested on behalf of the importers that each licencee was entitled to import the quantity mentioned in the notifications, this Court not only upheld the notifications and the trade notice in question but also held that any import made under the cover of the interim order cannot be regarded as bona fide; and being contrary to the applicable notifications and trade notice, would be so dealt with under the provisions of the Customs Act. However, what has happened after the aforesa....
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....goods; and proceeded to pass the order-in-original on 28.08.2020 (which was issued on 03.09.2020). 22.2. The Adjudicating Authority observed in its order-in-original dated 28.08.2020 that the goods were imported by the importer in the month of November 2019 under the protection of the interim order granted by the Rajasthan High Court but, when held to have been imported in contravention of the applicable notifications, they became prohibited goods Under Section 11 of the Customs Act read with Section 3 of the FTDR Act; and hence, the goods were liable to confiscation Under Section 111(d) of the Customs Act. Further, the importer was also held liable for penalty Under Section 112(a)(i) of the Customs Act. The relevant findings of the Adjudicating Authority could be usefully extracted as under: 9. The impugned goods were imported in contravention of the DGFT notifications No. S.O. 1478(E) :, 1479(E) :, 1480(E) : and 1481(E) : dated 29.03.2019 and subsequent trade notice No. 06/2019-2020 Dated 16.04.2019. Thereby, the impugned goods became prohibited Under Section 11 of the Customs Act, 1962 read with Section 3 of the FOREIGN TRADE (DEVELOPMENT AND REGULATION) ACT, 1992. H....
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....M/s. Harihar Collections is not materially different except for a few individual facts. This importer had, on 18.11.2019, filed eight bills of entry on 18.11.2019 bearing numbers 5720040, 5720192, 5720693, 5722458, 5722730, 5719772, 5722243 and 5722456 for clearance of 38,500 MTs of yellow peas, said to have been imported under the cover of interim order passed by the Rajasthan High Court on 10.07.2019 in WP No. 11752 of 2019. In this case too, the goods were not released in view of objections and were stored in a warehouse. 23.1. Soon after the decision of this Court in the case of Agricas (supra) on 26.08.2020, this importer also sent a similar communication on the same day to the Adjudicating Authority, seeking waiver of show cause notice Under Section 124 of the Customs Act and for expeditious personal hearing. This case was also considered expeditiously and another order-in-original of similar nature was passed by the Adjudicating Authority on 28.08.2020 (issued on 03.09.2020). 23.2. Almost on the similar considerations as noticed above in the case of M/s. Raj Grow Impex, the Adjudicating Authority held that the goods in question became prohibited goods Under Section 11 ....
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....over import of peas as also to the judgment of this Court in Agricas (supra). The DGFT stated that any release of imported peas would be contrary to the import policy; that they were in the process of obtaining legal opinion from the ASG; and till then, the field formations under the Customs may be directed not to release the consignments of peas and, if any such consignments had been released, the details may be provided. It appears that acting on this communication from DGFT, the Zonal Additional Director General of Foreign Trade at Mumbai issued necessary instructions and thereupon, the Deputy Commissioner of Customs, Import Docs (Import-I), Mumbai, issued a letter dated 02.09.2020, instructing the Mumbai Port Trust authorities to stop the release of the goods in question. This led to the stoppage of unloading and release of the goods whereupon, the Respondent-importers made a request to the Commissioner of Customs (Import-I), Mumbai on 03.09.2020 to release the cargo when the requisite fine and penalty had already been paid. However, the Respondent-importers received the communication from Mumbai Port Trust authorities that the cargo stored in the port trust premises will not b....
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....dering and directing the Respondent No. 4 itself, its officers, subordinates, servants and agents to release the goods imported vide 7 Bills of Entry bearing Nos. 5520537, 5520538, 5520539, 5520540, 5520541, 5520872 and 5521191 on payment of Redemption Fine and Penalty; (d) that pending the hearing and final disposal of this Petition, that this Hon'ble Court be pleased to- i. restrain the Respondent Nos. 3 and 4 itself, its officers, subordinates, servants and agents from taking any further action to stop the clearance of the goods imported by the Petitioner vide Bills of Entry Nos. 5520732, 5520871 and 5520536 all dated 01.11.2019; ii. direct the Respondent No. 4, itself, its officers, subordinates, servants and agents to clear the goods imported by the Petitioner vide Bills of Entry Nos. 5520732, 5520871 and 5520536 all dated 01.11.2019; iii. direct the Respondent No. 7 and Respondent No. 4 itself, its officers, subordinates, servants and agents to release the goods imported vide 7 Bills of Entry bearing Nos. 5520537, 5520538, 5520539, 5520540, 5520541, 5520872 and 5521191 on payment of Redemption Fine and Penalty; (e) for ad-inter....
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....pondents to file an affidavit within 10 days while fixing the matter for consideration on 06.10.2020. 26. While the aforesaid writ petitions remained pending with the High Court, the Commissioner of Customs (Import-II), Mumbai, in exercise of his powers Under Section 129D(2) of the Customs Act, proceeded to issue separate orders dated 01.10.202012, stating various grounds on which the said orders-in-original were questionable on legality and propriety; and directed the authority concerned to apply to the Commissioner (Appeals) for setting aside the said orders and for passing a suitable order as deemed fit. The grounds stated in the aforesaid orders dated 01.10.2020 carry their own relevance for the issues arising in these appeals and the same may also be noticed in the requisite details. 26.1 In the case of M/s. Raj Grow Impex, the Commissioner found the following shortcomings: a. Non-issuance of show cause notice With reference to Section 124 of the Customs Act, the Commissioner opined that the order-in-original suffered from a legal infirmity for want of serving a detailed show cause notice incorporating all the relevant grounds of confiscation. The Commissioner obse....
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.... consideration. In this regard, the Commissioner referred, inter alia, to Section 2(33) of the Customs Act defining prohibited goods as also Sections 111 and 113 thereof. The Commissioner further reproduced the findings of this Court in the case of Agricas (supra) on the implication and meaning of the quantitative restrictions in the subject notifications and observed as under: The adjudicating authority failed to consider the same in this order. The adjudication authority while addressing the question of allowing redemption of impugned goods on payment of fine, did not apply his mind on the legislative intent for imposing restrictions on the import of Green peas. Redemption has been allowed mechanically without going into the merits or demerits of allowing such an option, thus circumventing the legislative intent behind the restrictions. (emphasis in bold supplied) d. No reasons were given as to why absolute confiscation or re-export was not taken into consideration The Commissioner further referred to the fact that the goods became prohibited Under Section 11 of the Customs Act read with Section 3 of the FTDR Act and found omission on the part of the Adjud....
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....rit petitions filed by the importers were taken up for consideration by the High Court and were decided by the common order dated 15.10.2020. This common order has been challenged in the appeal arising out of SLP(C) Nos. 14633-34 of 2020. Therefore, before dilating on the orders-in-appeal dated 24.12.2020, it is necessary to examine the impugned order dated 15.10.2020 in requisite details with the relevant particulars. The order dated 15.10.2020 and its modification dated 09.12.2020: The High Court issues mandamus for release of goods. 28. As noticed, the Respondent-importers, before passing of the said order dated 01.10.2020, had already approached the High Court on 15.09.2020 seeking mandamus for clearance of the goods imported by them while also questioning the communications denying them the release of the goods in question. In these writ petitions, the High Court had issued notice and directed the Respondents to file an affidavit within 10 days while fixing the matter for consideration on 06.10.2020 but, in the interregnum, the Commissioner of Customs (Import-I), Mumbai passed the aforesaid orders dated 01.10.2020 Under Section 129D(2) of the Customs Act. 29. When the....
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....gnizance of the grievance made by the Petitioner and was in seisin of the matter fixing 06.10.2020 for consideration, it was highly improper on the part of Commissioner of Customs (Import-II) to have passed the order dated 01.10.2020 without any intimation to or taking leave of the Court. It needs no reiteration that when the court, that too the High Court, is in seisin of a matter, an administrative or executive authority cannot start a parallel proceeding on the very same subject matter at its own ipse dixit and record a finding. It would amount to interfering with the dispensation of justice by the courts. In the instant case, when the Court was set to examine the grievance of the Petitioner regarding non-release of the goods despite the order-in-original, what was sought to be done was to present the Court with an order passed in the midst of such examination keeping the Court totally in the dark saying that the order-in-original suffers from illegality or impropriety directing the subordinate authority to apply to the Commissioner (Appeals) to set aside the order-in-original and then contending that the writ petition should be dismissed because of the subsequent development or....
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....etitioner made a request not to issue show cause notice but to give him personal hearing. This was accepted by the adjudicating authority which power admittedly he has under the first proviso to Section 124 and he has given reasons for the same i.e., long pendency and perishable nature of the consignments. 32.2. As regards the second ground of non-addressal of the issue of suspension of import export code of the importer, the High Court referred to the observations of this Court in Agricas (supra) that such issue was left open to be decided in the pending statutory appeal; and even otherwise, the order of suspension dated 06.12.2019 had barred the importer prospectively and such suspension in no way impacted the imports in question. The High Court said: 33.2. In view of what the Supreme Court had observed the adjudicating authority could not have taken up and examined such order of suspension. Besides, from a perusal of the order of suspension dated 16.12.2019 it is evident that the said order has barred the Petitioner from conducting any further import and export meaning thereby that it is prospective and in no way impacted the import made prior to that date which was ....
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.... appeal pursuant to the said order dated 01.10.2020. The High Court, however, observed that the manner of passing of the said order dated 01.10.2020 was definitely questionable and further observed that the contents of the said order and the grounds given, as examined prima facie, did not make out that the order passed by the Adjudicating Authority was suffering from any such illegality and impropriety that suo motu revisional powers Under Section 129D(2) should have been exercised. The High Court iterated that on prima facie examination of the stated grounds, the orders-in-original could not be said to be unlawful or inappropriate or unjust or beyond the bounds of the Adjudicating Authority. However, it was reiterated that since application had been filed which would be decided as an appeal, the High Court was limiting its examination to the justification or otherwise of not releasing the goods on the strength of the order dated 01.10.2020. These observations of the High Court, occurring in paragraph 36 of the impugned order read as under: 36. We have examined the grounds given in the order dated 01.10.2020 not as an appellate authority over the Commissioner but only to s....
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....ortionately to the quantity declared in the bills of entry. Petitioner has complied with the terms and conditions of the order-in-original and made the necessary payments. Out of charge has been issued. Because of warehousing of the goods Under Section 49 of the Customs Act, Petitioner is required to pay a substantial amount to the customs authority. In the above context and after thorough consideration of all aspects of the matter, we are of the view that non-release or withholding of the imported goods of the Petitioner any further would not be just and proper. At least the grounds given in the order dated 01.10.2020, which order itself was passed in a highly improper manner, do not justify that the goods should be withheld or denied release notwithstanding the order-in-original and compliance thereto. Conclusion 38. Consequently, we direct the Respondents more particularly Respondent Nos. 4 to 7 to forthwith release the goods of the Petitioner covered by bills of entry bearing Nos. 5720040, 5720192, 572069, 5722458, 5722730, 5719772, 5722243 and 5722456, all dated 18.11.2019. Similar direction also follows in Writ Petition No. 3502 of 2020 in respect of bills o....
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....ate orders-in-appeal dated 24.12.2020. Having regard to the questions involved, it would also be appropriate to take note of the salient features of the orders so passed by the Appellate Authority on 24.12.2020. Orders dated 24.12.2020 by the Appellate Authority: Orders-in-original set aside with enhancement of penalty 38. In the order-in-appeal dated 24.12.2020 in relation to the case of M/s. Raj Grow Impex, the Appellate Authority thoroughly examined the contents of the order-in-original dated 28.08.2020 and the grounds of appeal as also the submissions and counter submissions of the parties; and thereafter, formulated the issues requiring determination as follows: 52.2. From the plain reading of the submissions dated 16.12.2020 made by the Respondents, I have observed that there has been some technical/peripheral issues raised by them, which includes maintainability of the present appeal on the grounds like Additional Commissioner being equivalent to the Commissioner of Customs and hence, the appeal, if any, will not lie with Commissioner(Appeals) and the issue of Review Vs Revision as dealt by Hon'ble High Court in its order. Further, from the grounds of appe....
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....eas what was decided by the order dated 15.10.2020 of Hon'ble High Court of Bombay is one relating to the release of the goods and not the merits of the adjudication order, which was not even assailed before Hon'ble Court. b) The Hon'ble High Court of Bombay had ordered release of goods by virtue of the Adjudication Order dated 28.08.2020 but has vide para 36 of the very same order allowed this Appellate Authority to hear the appeal on merits and pass appropriate orders. c) Hon'ble High Court of Bombay having allowed this Appellate Authority to decide the appeal, this authority had provided adequate opportunities of hearing, exchange of written submission and receiving the rejoinder submissions and therefore now can proceed to pass final orders and once final order gets passed, the Order of Adjudication would merge into the same. The said process has not been barred by the Hon'ble High Court. Considering the above facts, I have decided to exercise my appellate jurisdiction in this matter and therefore, the contentions of the Respondent in this regard is not acceptable. 38.2. After taking note of the findings of this Court in Agricas....
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....ies would have been launched it may have brought out the facts like mis-declaration, etc., but since it is not a subject matter of this appeal, hence refrain to discuss about it any further. c. After the aforesaid, the Appellate Authority dealt with the core questions, as regards operation of Section 125 of the Customs Act and exercise of discretion by the Adjudicating Authority in this case. The Appellate Authority took note of the ratio in the decisions of this Court in the cases of Garg Woollen Mills (P) Ltd. v. Addl. Collector of Customs, New Delhi: (1999) 9 SCC 175, Sant Raj and Anr. v. O.P. Singla and Anr.: (1985) 2 SCC 349 and Reliance Airport Developers (P) Ltd. v. Airports Authority of India and Ors.: (2006) 10 SCC 1 as also the relevant provisions of the Customs Act and the FTDR Act and stated its findings against the proposition of the release of goods and in favour of their absolute confiscation, inter alia, in the following words: 54.3. Non-consideration of various issues in allowing redemption of goods xxx xxx xxx e. The Revenue seems to have made a strong case of absolute confiscation which is in sync with the decision of the Hon'ble....
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.... value of yellow peas is 2028 per quintal". Further in Para 48 the Hon'ble Supreme Court has held that imports, if any made, relying on interim orders would be contrary to the notifications and the trade notices issued under the FTDR Act, 1992. And in Para 46 the Hon'ble Court held that the importers cannot be said to have had bonafide belief and took their chance for personal gains and profits importing under interim orders and accordingly have to face the consequences in law. So the Hon'ble Supreme Court has noted that quantities much more than annual quota have already been imported by the importers on the strength of interim orders and I agree with the contention of the Appellant that under these circumstances allowing any import inside the country, even if against fine and penalty, is patently perverse. Further, as detailed earlier, the domestic production of pulses and therefore, the Govt. has imposed restrictions giving only a small window of annual import under defined quota prices. The Govt. has also procured peas and pulses under various schemes at Minimum Support Price. Consequently, the buffer stock with the Govt. is very high. Therefore, any additional supp....
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....sed) were not available for absolute confiscation and accepted that as fait accompli while directing appropriation of the redemption fine paid in this regard. The Appellate Authority also enhanced the penalty from Rs. 1.485 crores to a sum of Rs. 5 crores Under Section 112(a)(i) of the Customs Act and passed the final order in the following terms: 57. Accordingly, I pass the following order: ORDER i. I order absolute confiscation of the goods covered in Bill of Entry Nos. 5520537, 5521191, 5520538, 5520539, 5520540, 5520541 and 5520872 all dated 01.11.2019 Under Section 111(d) of the Customs Act, 1962 read with Section 3(3) of Foreign Trade (Development & Regulations) Act, 1992. ii. I order absolute confiscation of the goods covered under Bills of Entry Nos. 5520732, 5520871 and 5520536 all dated 01.11.2019 Under Section 111(d) of the Customs Act, 1962 read with Section 3(3) of Foreign Trade (Development & Regulations) Act, 1992. But, since the goods covered under these 03 Bills of Entry have already been cleared and not available for absolute confiscation, I am constrained to accept it as fait accompli and Redemption Fine already paid, if any, i....
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....tent and the Appeal filed by the Revenue stands disposed off accordingly. Another round in High Court: Challenge to the order-in-appeal dated 24.12.2020 and stay order by the High Court dated 05.01.2021 40. Though the person aggrieved by the said orders-in-appeal could have preferred statutory appeal Under Section 129A of the Customs Act before the Customs, Excise and Service Tax Appellate Tribunal14 but, the Respondent-importer M/s. Raj Grow Impex approached the High Court against the order-in-appeal by way of Writ Petition (ST) No. 24 of 2021 and also filed a contempt petition stating willful disobedience of the High Court's (modification) order dated 09.12.2020 because the goods covered by the said order had not been released. 41. Taking up the writ petition so filed by the importer, the High Court referred to its previous orders dated 15.10.2020 and 09.12.2020 and took exception against the impugned order-in-appeal dated 24.12.2020 while observing that the observations made and the directions issued by the Appellate Authority were not correct and were running contrary to its directions. The High Court stayed the operation of the order-in-appeal dated 24.12.2020 and....
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....e orders so passed by the High Court while asserting that the goods in question are liable to absolute confiscation. 44.1. Assailing the orders passed by the High Court, the learned ASG would submit that the High Court has erred in entertaining the writ petitions and in passing the order dated 15.10.2020 for implementing the orders-in-original dated 28.08.2020 and thereby, for release of the subject goods though the orders so passed by the Adjudicating Authority were not final and were subject to appeal; and, in fact, the appeals had indeed been filed pursuant to the review orders dated 01.10.2020. With reference to the observations and directions of the High Court in the order dated 15.10.2020, the learned ASG has pointed out that on one hand, the High Court permitted the Commissioner (Appeals) to proceed with the appeals filed by the Department but, at the same time, also directed that the goods be released. According to the learned ASG, the directions for release of the goods rather defeated the purpose of adjudication before the Commissioner (Appeals) on the question as to whether or not the goods were liable to be confiscated absolutely. On the same lines, it has also been ....
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....ks International and Ors.: (2007) 10 SCC 396 to submit that if the conditions for import and export of goods are not complied with, it would be considered to be the case of prohibited goods. Another decision of this Court in Om Prakash Bhatia v. Commissioner of Customs, Delhi : (2003) 6 SCC 161 has also been referred. 44.3. The learned ASG has also addressed the issue pertaining to the mode of monitoring the limit specified in the notifications and has submitted that every importer has to apply and obtain a licence for importing restricted goods; and the goods could be cleared from the port only upon obtaining such a licence. Every importer is allotted a quota to be imported; the approving authority has to apply his mind and approve the licence; and only upon such satisfaction of the approving authority and issuance of licence that an importer gets a right to import and else, right to import is not a vested right, as held in P.T.R. Exports (Madras) Pvt. Ltd. and Ors. v. Union of India and Ors.: (1996) 5 SCC 268. It has been argued that obtaining the licence being a condition precedent for importing restricted goods, any violation of this condition would render the goods as prohi....
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....ifications have put an embargo on the quantity of pulses that can be imported into the country and allowing any import over and above the restriction would be against the very purpose of the restriction. The learned ASG has referred to the observations made by this Court in Agricas (supra), as regards the excessive quantity having been imported under the cover of the interim orders in the past, much beyond the annual quota fixed as also the observations that the present importers had worked only for personal gains and had not acted bona fide. Thus, the exercise of discretion by the Adjudicating Authority being not in accord with law, cannot be approved. 44.6. As regards the decision in the case of Commissioner of Customs v. Atul Automations Private Limited (2019) 3 SCC 539, strongly relied upon by the importers, the learned ASG has argued that therein, this Court upheld the decision for release of the goods for the same being not prohibited goods and for the reasons, inter alia, that: (i) the goods in question were MFDs (Multi-Function Devices, Photocopiers and Printers) and they had a utility/shelf life for 5-7 years; and (ii) the Central Government permitted the import of used....
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....e objections taken by the Respondent against jurisdiction of the said Appellate Authority but, according to the learned Counsel, the Appellate Authority, within three days of hearing, hurriedly proceeded to pass the order-in-appeal dated 24.12.2020, setting aside the order-in-original dated 28.08.2020 and ordering absolute confiscation of the goods while enhancing the penalty. 45.2. While supporting the order-in-original dated 28.08.2020 as also the orders passed by the High Court on 15.10.2020, 09.12.2020 and 05.01.2021, the learned Senior Counsel would argue that in true operation of the provisions of the Customs Act and the FTDR Act read with the pronouncement of this Court in Agricas (supra), the goods in question were not liable to be confiscated absolutely and had rightly been ordered to be released on payment of redemption fine. 45.3. With reference to the decision of this Court in Agricas (supra), the learned Counsel has strenuously argued that once this Court has held, in unequivocal terms, that the notifications in question were issued imposing restrictions, may be not Under Section 9A of the FTDR Act but Under Section 3(3) thereof, the question does not arise to in....
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....terference. The contentions have been elaborated with reference to the use of the expression 'may' in regard to the prohibited goods in Section 125 of the Customs Act; and it has been argued that it is not the expression that the Adjudication Authority 'shall not' give an option to pay fine in lieu of confiscation. It is submitted that Adjudicating Authority is to exercise the discretion provided to him Under Section 125 of the Customs Act objectively and this discretion cannot be taken away through a judicial proceeding. In regard to this line of argument, strong reliance has been placed on the decision of this Court in the case of Hargovind Das K. Joshi and Ors. v. Collector of Customs and Ors. (1987) 2 SCC 230. Further, with reference to the decision of this Court in the case of Sant Raj (supra), it has been argued that whenever something has to be done within the discretion of the authority then, that thing has to be done according to the Rules of reasons and justice and not according to private opinion. In other words, discretion means sound discretion guided by law. 45.7. It has also been contended that only 17,000 MTs of yellow peas imported by this Respon....
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....r MoU. With reference to these factors, the contention has been that the goods in question, meant for human consumption, were not absolutely prohibited for import, unlike specifically notified prohibited goods. Simply put, according to the learned Counsel, goods in question were not of 'absolutely prohibited' category from any point of view. 46.2. It has further been submitted that since the imports in question were not covered by the import licence, the goods in question were to be dealt with Under Section 125 of the Customs Act; and had rightly been so dealt with by the Adjudicating Authority, who held them liable to confiscation and to be redeemed on payment of redemption fine and duty, which the Adjudicating Authority indeed levied apart from personal penalty. It has been pointed out that pursuant to the payment of the entire duty, fine and penalty, aggregating to a sum of about Rs. 44.21 crores, OOC was given and the goods were allowed clearance after the authority was satisfied that they were fit for human consumption. The order-in-appeal dated 24.12.2020 in relation to this importer has also been referred with the submissions that therein, the Commissioner of Cust....
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....f these appeals inasmuch as they too have imported various quantities of peas/pulses pursuant to the interim orders in their respective writ petitions by the High Court of Rajasthan but clearance of the goods remains stalled, particularly because of the present litigation. Having regard to the circumstances, we may also take note of the submissions made on their behalf. 47.1. It has been submitted on behalf of the intervener Nikhil Pulses Pvt. Ltd. that it had similarly filed WP No. 12283 of 2019, wherein the High Court passed an interim order dated 02.08.2019 in its favour; and pursuant to the interim order, it had imported 1,02,550 MTs of yellow peas at Adani SEZ, Mundra, Gujarat under fifty-nine bills of lading of the month of September 2019 and had filed bills of entry for home consumption but, such bills have remained unassessed. 47.1.1. Similar arguments have been advanced on behalf of this importer as regards difference between 'restricted' goods and 'prohibited' goods and their treatment under the Customs Act, the FTDR Act and the Trade Policy; and it is submitted that the goods in question are only 'restricted' items and not 'prohibited....
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....se. 47.1.4. The Applicant would further submit that the goods are perishable commodities and have been lying at the port for long and now, their re-export is not feasible anymore for a variety of factors, including the present times of pandemic. It has, therefore, been prayed that the cargo in question may be allowed to be released for the domestic market on payment of redemption fine and penalty. 47.2. It has been submitted on behalf of the other intervener Agricas LLP that it had earlier filed WP No. 9321 of 2019, wherein the High Court passed an interim order dated 24.05.2019 in its favour; and pursuant to the interim order it had imported 480.54 MTs of black mapte/urad in July 2019 that were released on execution of bond. Further, this importer filed another writ petition bearing No. 13392 of 2019 wherein, the High Court passed interim order dated 14.08.2019 and thereafter, it had imported a quantity of 27,775 MTs of black mapte that arrived in November 2019 from which, 14,366 MTs were released and cleared on payment of requisite charges but the balance has not been released. It is stated by this importer that pursuant to the show cause notice dated 05.10.2020, the Commis....
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....r redemption on payment of fine and such discretion has rightly been exercised in the orders-in-original; that the discretion cannot be ordered to be exercised in any particular manner; that re-export of the subject goods is not a feasible option and the demand and supply of the pulses in question being dynamic in nature, the release of the subject goods will not be adverse to the economy; that the orders-in-appeal could be challenged in further statutory appeal. 49. We have given anxious consideration to the rival submissions and have perused the material placed on record with reference to the law applicable. Points for determination 50. The narration and the recounts foregoing make it evident that the root question in these matters is as to whether the goods in question are liable to absolute confiscation or they could be released with payment of fine in lieu of confiscation? 50.1. With intervention of the High Court of Judicature at Bombay in the writ jurisdiction and by way of the impugned orders dated 15.10.2020 (read with the modification order dated 09.12.2020) and 05.01.2021, the issues concerning legality and validity of the orders so passed by the High Court a....
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....l for and examine the record of any proceeding in which a Principal Commissioner of Customs or Commissioner of Customs as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Commissioner or any other Commissioner to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Committee of Principal Chief Commissioners of Customs or Chief Commissioners of Customs in its order: Provided that where the Committee of Principal Chief Commissioners of Customs or Chief Commissioners of Customs differs in its opinion as to the legality or propriety of the decision or order of the Principal Commissioner of Customs or Commissioner of Customs, it shall state the point or points on which it differs and make a reference to the Board which, after considering the facts of the decision or order passed by the Principal Commissioner of Customs or Commissioner of Customs, if is of the opinion that the decision or order passed by the Principal Commissioner of Customs or Com....
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.... from the appellate powers of the departmental Appellate Authority or the Appellate Tribunal and apart from the powers of revision of the Central Government. Such residual power, as conferred by Section 129D of the Customs Act or Section 35E of Central Excise Act, is essentially to serve the purpose that the highest controlling authority of the Department (or a Committee of such highest authorities) satisfies itself as to the legality and propriety of any decision taken by the subordinate authority and, in case it finds any points arising from the decision in question, to direct the authority passing such order or any other subordinate authority to apply to the appellate forum for determination of such points/questions. In the scheme of the Customs Act, the power of revision is reserved for the Central Government, as per Section 129DD thereof. Similar power of revision in the Central Government could be seen in Section 35EE of the Central Excise Act. Thus, in the scheme and on the purpose of these enactments, it cannot be said that such residual power, of requiring the matter to be taken up before the appellate forum, is that of revision stricto sensu. However, it does not appear n....
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....' time to pass the order Under Section 129D(2) and thereby to ensure taking up of the matter against the orders-in-original dated 28.08.2020 by the Appellate Authority but, the importers preferred the writ petitions questioning the communication of DGFT and the denial of release of goods; and sought mandamus for such release. Such a prayer for mandamus was effectively a prayer for execution of the orders-in-original dated 28.08.2020. The High Court found it unjustified on the part of the Department to suggest that the writ petitions were rendered infructuous because of the orders dated 01.10.2020; and to this extent, we are again at one with the High Court because, on the strength of any order passed by the Commissioner during the pendency of the writ petitions, it could not have been claimed that the Department, by its own actions, made the writ petitions meaningless. However, such a submission on the part of the Respondents of the writ petition, even if unwarranted, could not have taken the worth and value out of orders dated 01.10.2020; and, at the same time, the High Court could not have ignored the other material circumstances. 54.3. One of the fundamental and material ....
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....gh Court even observed that its findings in the order dated 15.10.2020 could not have been regarded as prima facie finding only; and when the goods were directed to be released forthwith, it was beyond comprehension as to how a lower Appellate Authority could have nullified such directions by ordering absolute confiscation. 56. We find it very difficult to reconcile the observations of the High Court in these matters. Paragraph 36 of the order dated 15.10.2020 left nothing for a doubt with anyone that whatever the High Court had observed in that order as regards the orders dated 01.10.2020 was not of final determination; and the matter was left open, to be decided by the Commissioner (Appeals). Significantly, if the purport of the order dated 15.10.2020 had been that even if Commissioner (Appeals) would be deciding the matter in appeal, he could not order absolute confiscation of the goods because the High Court had ordered their release, it would immediately lead to the position that the order dated 15.10.2020 of the High Court carried inherent contradictions. In other words, if release of goods was the only option available with the authorities, the material part of considerat....
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.... facts as also the material factors concerning the imports in question, including the reasons for issuance of the notifications in question that the same were to safeguard the agriculture market economy of India; and the observations and findings of this Court in the case of Agricas (supra). An examination of the impugned order dated 15.10.2020 in its entirety makes it clear that the reasons for directing release of goods in favour of the importers are to be found only in paragraph 37 thereof. Therein, the High Court has taken into account a few factors standing in favour of the importers like the orders-in-original holding the field; the importers having made the necessary payments; and the importers incurring expenditure because of warehousing. An additional factor had been the High Court's dissatisfaction that the orders dated 01.10.2020 were passed in an improper manner and grounds given therein were not justifying the withholding of the goods. While proceeding on these reasons and considerations, it appears that the other overriding factors like the interest of domestic agriculture market economy as also the findings and observations of this Court in Agricas (supra) totall....
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....d to examine in the first place as to whether the goods in question fall in the category of prohibited goods, as argued on behalf of the Appellants or in the category of restricted goods, as argued on behalf of the importers. Whether the goods in question are of 'prohibited goods' category? 63. For dealing with the questions relating to the treatment of the goods in question, it shall be apposite to recapitulate that in the case of Agricas (supra), this Court, after dealing with a variety of issues relating to the validity of the notifications dated 29.03.2019 and the corresponding trade notice dated 16.04.2019, specifically referred to the purpose behind and the purport of the notifications; and it was noticed that the notifications were aimed at striking a balance between the farmers of the country on one hand and the importers on the other, particularly when large-scale imports were adversely impacting the interests of the farmers due to fall in prices in the local market. The repercussions of excessive imports under the cover of the interim orders in the past were taken note of and it was also noticed that the restrictions were imposed to prevent panic disposal in....
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....hnology, only when the service or technology provider is availing benefits under the foreign trade policy or is dealing with specified services or specified technologies. (3) All goods to which any Order under Sub-section (2) applies shall be deemed to be goods the import or export of which has been prohibited Under Section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly. (4) without prejudice to anything contained in any other law, rule, regulation, notification or order, no permit or licence shall be necessary for import or export of any goods, nor any goods shall be prohibited for import or export except, as may be required under this Act, or Rules or orders made thereunder. Section 2(33) of the Customs Act, 1962: (33) "prohibited goods" means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported, have been complied with; Section 11(1) of the Customs Act, 1962: ....
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....ifications could have been imported, like those upto 1.5 lakh MTs; and that too, under a licence. The learned ASG has rightly pointed out with reference to the decision in PTR Exports (supra) that an Applicant has no vested right to have export or import licence; and granting of licence depends upon the policy prevalent on the date. The learned ASG has further rightly submitted, with reference to the decision in S.B. International (supra), that granting a licence to import is not a matter of formality; and the authorities have to satisfy themselves that the application satisfies all the requirements of the scheme and the applicable laws. In S.B. International, this Court observed, inter alia, as under: 9. It should be noticed that grant of licence is neither a mechanical exercise nor a formality. On receipt of the application, the authorities have to satisfy themselves about the correctness of the contents of the application. They also have to satisfy themselves that the application satisfies all the requirements of the scheme and the other applicable provisions of law, if any.... 66.2. As noticed, only the particular restricted quantity of the commodities covered by th....
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....t or export is to an extent a prohibition. The expression "any prohibition" in Section 111(d) of the Customs Act, 1962 includes restrictions. Merely because Section 3 of the Imports and Exports (Control) Act, 1947 uses three different expressions "prohibiting", "restricting" or "otherwise controlling", we cannot cut down the amplitude of the word "any prohibition" in Section 111(d) of the Act. "Any prohibition" means every prohibition. In other words all types of prohibitions. Restriction is one type of prohibition..... (emphasis in bold supplied) 67.2. In the case of Om Prakash Bhatia (supra), over-invoicing and fraudulent claim of drawback by the exporter was held to be that of exporting prohibited goods with reference to the requirements of Foreign Exchange Regulation Act, 1973, while rejecting the contention of the exporter that Section 113(d) of the Customs Act was not applicable as the goods were not prohibited as such. A line of argument has been suggested on behalf of one of the Respondents that the order ultimately passed in the case of Om Prakash Bhatia operates against the stand of the Appellants. It is true that in that case, redemption fine and penalty was ....
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....stricted' goods; and the same principle applies to the subject goods when they have been imported without import licence and hence, they cannot be taken as prohibited goods. The submissions have been countered by the ASG that the said decision related to the matter under the FTDR Act and different facts and different regulations concerning the goods were involved therein. 67.4.1. In the case of Atul Automations (supra), the goods imported without authorisation were found to be not 'prohibited' but 'restricted' items for import and the orders for their release with payment of fine in lieu of confiscation were approved. However, a close look at the factual aspects puts it beyond the pale of doubt that therein, this Court has neither laid down the law that in every case of import without authorisation, the goods are to be treated as restricted and not prohibited nor that the goods so imported without authorisation are always to be released on payment of redemption fine. 67.4.2. The factual aspect of Atul Automations (supra) makes it clear that the imported Multi-Function Devices, Photocopiers and Printers (MFDs) involved in that case were restricted items, im....
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....DGFT or other provisions of FTDR Act are, therefore, rejected. The goods in question fall in the category of 'prohibited goods'. Whether the goods in question are liable to absolute confiscation? 69. Once it is clear that the goods in question are improperly imported and fall in the category of 'prohibited goods', the provisions contained in Chapter XIV of the Customs Act, 1962 come into operation and the subject goods are liable to confiscation apart from other consequences. Having regard to the contentions urged and the background features of these appeals, the root question is as to how the goods in question are to be dealt with Under Section 125 of the Customs Act? The relevant part of Section 125 of the Customs Act reads as under: Section 125(1) of the Customs Act, 1962 125. Option to pay fine in lieu of confiscation.--(1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, wher....
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....is in bold supplied) 70.2. In the case of Reliance Airport Developers (supra), this Court, with reference to various pronouncements pertaining to the legal connotations of 'discretion' and governing principles for exercise of discretion observed, inter alia, as under: 30. Discretion, in general, is the discernment of what is right and proper. It denotes knowledge and prudence, that discernment which enables a person to judge critically of what is correct and proper united with caution; nice discernment, and judgment directed by circumspection: deliberate judgment; soundness of judgment; a science or understanding to discern between falsity and truth, between wrong and right, between shadow and substance, between equity and colourable glosses and pretences, and not to do according to the will and private affections of persons. 70.3. In the case of U.P. State Road Transport Corporation (supra), while dealing with the case of non-exercise of discretion by the authority, this Court expounded on the contours of discretion as also on limitations on the powers of the Courts when the matter is of the discretion of the competent authority, in the following terms: ....
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....cannot disregard the substantive provisions of statute while observing, inter alia, as under: 12. Indubitably, the powers of the High Court Under Article 226 of the Constitution are wide, but certainly not wider than the plenary powers bestowed on this Court Under Article 142 of the Constitution. Article 142 is a conglomeration and repository of the entire judicial powers under the Constitution, to do complete justice to the parties. Even while exercising that power, this Court is required to bear in mind the legislative intent and not to render the statutory provision otiose. 71. Thus, when it comes to discretion, the exercise thereof has to be guided by law; has to be according to the Rules of reason and justice; and has to be based on the relevant considerations. The exercise of discretion is essentially the discernment of what is right and proper; and such discernment is the critical and cautious judgment of what is correct and proper by differentiating between shadow and substance as also between equity and pretence. A holder of public office, when exercising discretion conferred by the statute, has to ensure that such exercise is in furtherance of accompl....
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.... with. This Court, inter alia, observed and held as under: 5. Another contention that was urged by Shri Mahabir Singh was that the Additional Collector, as also the Tribunal, have failed to take into consideration the provisions contained in Section 125 of the Act which prescribes that whenever confiscation of any goods is authorised by the Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under the Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit. We do not find any merit in this contention of Mr. Mahabir Singh. Under Section 125 a discretion has been conferred on the officer to give the option to pay fine in lieu of confiscation in cases of goods, the importation or exportation whereof is prohibited under the Act or under any other law for the time being in force but in respect of other goods the officer is obliged to give such an option. In ....
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....ssioner of Customs, in his order dated 16.10.2020, while considering the request of importer for provisional release, referred to three conditions in the notification dated 18.12.2019 as modified in the notification dated 28.03.2020; and ordered absolute confiscation of the goods for contravention of the provisions of Section 111(d) of the Customs Act read with Section 3(3) of the FTDR Act; and imposed a penalty of Rs. 4 lakhs. The importer challenged the order of Commissioner before the Appellate Tribunal. The Appellate Tribunal observed that the subject goods, having been imported in violation of the conditions of EXIM Policy, acquired the nature of prohibited goods in terms of Section 2(33) of the Customs Act and were liable to confiscation in terms of Section 111(d). Thereafter, the Tribunal formulated the question as to whether the Adjudicating Authority had an option to allow such goods to be redeemed on payment of fine in lieu of confiscation. After referring to the judgment of this Court in the case of Atul Automations (supra) and the order passed by the Bombay High Court in the case of M/s. Harihar Collections (impugned herein), the Tribunal directed redemption of impugned....
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....to Customs Commissioner in the case on hand the language of Section 125 of Customs Act is fully liberalised. The reasoning of Tribunal is adopted both by other primary authority/Appellate Tribunal, then Exim policy, notifications are defeated and opens floodgates of the import Green Peas, and such contingencies are commented by Supreme Court in Agricas Case. We are of the view that the consideration of Appellate Tribunal in the case on hand is illegal, ignored relevant notifications, the mandate of FTDR Act and Customs Act 1962. (emphasis in bold supplied) 76. On the other hand, the importers have placed heavy reliance upon the decision in the case of Hargovind Das K. Joshi (supra). Therein, a consignment of zip fasteners imported by the Appellants was ordered for absolute confiscation by the Additional Collector of Customs and a penalty was also imposed. The order was confirmed by the Appellate Tribunal. In appeal to this Court, three questions were raised by the Appellants, namely, on validity of the order confiscating the goods; on validity of the orders imposing penalty; and failure on the part of the customs authority to give an option to them for redeeming the goo....
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....iable to confiscation, straightaway proceeded as if the option for payment of fine in lieu of confiscation has to be given and did not consider the other part of discretion available with him that the goods could also be confiscated absolutely. 77. Thus, for what has been noticed above, the Kerala High Court has approved absolute confiscation of similar goods while following the decision of this Court in Agricas (supra) and after finding unsustainable the order of Tribunal for release of goods. In the case of Garg Woollen Mills (supra), this Court approved absolute confiscation when fraud was involved. In Hargovind Das K. Joshi (supra), when one part of discretion of Section 125(1) of the Customs Act was not taken into account, this Court remitted the matter for proper exercise of discretion. 78. It is true that, ordinarily, when a statutory authority is invested with discretion, the same deserves to be left for exercise by that authority but the significant factors in the present case are that the Adjudicating Authority had exercised the discretion in a particular manner without regard to the other alternative available; and the Appellate Authority has found such exercise of....
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....s case. 81. It needs hardly any elaboration to find that the prohibition involved in the present matters, of not allowing the imports of the commodities in question beyond a particular quantity, was not a prohibition simpliciter. It was provided with reference to the requirements of balancing the interests of the farmers on the one hand and the importers on the other. Any inflow of these prohibited goods in the domestic market is going to have a serious impact on the market economy of the country. The cascading effect of such improper imports in the previous year under the cover of interim orders was amply noticed by this Court in Agricas (supra). This Court also held that the imports were not bona fide and were made by the importers only for their personal gains. 82. The sum and substance of the matter is that as regards the imports in question, the personal interests of the importers who made improper imports are pitted against the interests of national economy and more particularly, the interests of farmers. This factor alone is sufficient to find the direction in which discretion ought to be exercised in these matters. When personal business interests of importers clash w....
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....the day of passing of the order by the Adjudicating Authority. 84. Hence, on the facts and in the circumstances of the present case as noticed and dilated hereinabove, the discretion could only be for absolute confiscation with levy of penalty. At the most, an option for re-export could be given to the importers and that too, on payment of redemption fine and upon discharging other statutory obligations. This option we had already left open in the order dated 18.03.2021, passed during the hearing of these matters. 85. For what we have observed hereinabove, the orders-in-original dated 28.08.2020 cannot be approved. As a necessary corollary, the orders-in-appeal dated 24.12.2020 deserve to be approved. However, before final conclusion in that regard, a few more aspects need to be dealt with. Invocation of equity by the importers 86. Various submissions invoking equity have been made on behalf of the importers while submitting that they have already suffered huge losses and that even re-export of subject goods is not a feasible option. 86.1. In regard to the submissions invoking equity, noticeable it is that various such features of equity were taken into consideration....
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....goods (under seven bills of entry) released after it had obtained release of goods under three bills of entry; and in that attempt, filed a fresh writ petition challenging the order-in-appeal and also filed a contempt petition in the High Court. 88.1. So far as the question of release of goods is concerned, the matter stands concluded once we have found that the goods covered by the notifications in question and by the judgment of this Court in Agricas (supra) are liable to absolute confiscation. Therefore, any prayer for release of any of such goods becomes redundant and cannot be granted by any authority or Court. Of course, it is true that the Appellate Authority has enhanced penalty from Rs. 1.485 crores to Rs. 5 crores but, the fact that this importer had taken release of the goods covered by three bills of entry and that aspect of the matter was required to taken as fait accompli by the Appellate Authority, in our view, effectively operates against any claim for reduction of the amount of penalty. Putting it differently, once we have approved the order-in-appeal, any attempt for further appeal by this importer shall remain an exercise in futility. 89. So far as the othe....
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.... Having regard to the scenario that has unfolded in the present cases, we are impelled to re-state that even though granting of an interim relief is a matter of discretion, such a discretion needs to be exercised judiciously and with due regard to the relevant factors. 92. In addition to the general principles for exercise of discretion, as discussed hereinbefore, a few features specific to the matters of interim relief need special mention. It is rather elementary that in the matters of grant of interim relief, satisfaction of the Court only about existence of prima facie case in favour of the suitor is not enough. The other elements i.e., balance of convenience and likelihood of irreparable injury, are not of empty formality and carry their own relevance; and while exercising its discretion in the matter of interim relief and adopting a particular course, the Court needs to weigh the risk of injustice, if ultimately the decision of main matter runs counter to the course being adopted at the time of granting or refusing the interim relief. We may usefully refer to the relevant principle stated in the decision of Chancery Division in Films Rover International Ltd. and Ors. v. Ca....
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....court to be exercised in the light of the facts and circumstances in each case. Though the above guidelines are neither exhaustive nor complete or absolute rules, and there may be exceptional circumstances needing action, applying them as prerequisite for the grant or refusal of such injunctions would be a sound exercise of a judicial discretion. (emphasis in bold supplied) 93. In keeping with the principles aforesaid, one of the simple questions to be adverted to at the threshold stage in the present cases was, as to whether the importers (writ Petitioners) were likely to suffer irreparable injury in case the interim relief was denied and they were to ultimately succeed in the writ petitions. A direct answer to this question would have made it clear that their injury, if at all, would have been of some amount of loss of profit, which could always be measured in monetary terms and, usually, cannot be regarded as an irreparable one. Another simple but pertinent question would have been concerning the element of balance of convenience; and a simple answer to the same would have further shown that the inconvenience which the importers were going to suffer because of the no....
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.... writ petitions so filed by the Respondent-importers are dismissed; (c) the impugned interim order dated 05.01.2021, as passed by the High Court in Writ Petition (ST) No. 24 of 2021 is also set aside and the said writ petition shall be governed by this judgment; (d) the orders-in-appeal dated 24.12.2020, as passed by the Appellate Authority in the respective appeals, are approved and consequently, the orders-in-original dated 28.08.2020 in the respective cases of the Respondent-importers stand quashed; (e) the orders-in-appeal having been approved by this Court, the questions of release of goods as also the quantum of penalty stand concluded with this judgment and hence, the prayer for keeping open the option of further statutory appeal stands rejected; and (f) the subject goods are held liable to absolute confiscation but, in continuity with the order dated 18.03.2021 in these appeals, it is provided that if the importer concerned opts for re-export, within another period of two weeks from today, such a prayer for re-export may be granted by the authorities after recovery of the necessary redemption fine and subject to the importer discharging o....