TaxTMI 
TaxTMI 
2025 (5) TMI 173
X X X X Extracts X X X X
X X X X Extracts X X X X
....Area A, Ludhiana, Punjab, and also having its Offices at Ludhiana, Chandigarh Delhi & Kolkata and is engaged in the business of Import of "Food Items" at various Sea ports including "Mumbai" as well as "Mundra" and "Dry Ports at "New Delhi" and "Ludhiana" & "Pune". 3. The brief facts which have culled out after perusing the entire record of the case are that the petitioner is an importer of food items. During the course of its business one consignment comprising of Kiwi fruit was imported in four containers from its foreign suppliers, namely, R.A. Logistics & Distribution LLC, Dubai, UAE. The imported food items were to be imported at the port of ICD GRFL, Ludhiana and the import documents issued by the shipping company i.e. Bill of Lading dated 16.4.2023 mentioned final place of delivery at Ludhiana. A request was made by the petitioner online for filling of the bill entry under Section 46 of the Customs Act, 1962 (hereinafter to be referred as 'the Act') for clearance of the good items at port of ICD Ludhiana. Request was made for seeking permission to file manual bill of entry in terms of Section 46 of the Act and circular dated 04.05.2011. But the request was not acceded to.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n as may be specified by the Central Government, by notification in the Official Gazette in this behalf shall, in the case of a vessel or an aircraft deliver to the proper officer an arrival manifest or import manifest] by presenting electronically prior to the arrival] of the vessel or the aircraft, as the case may be and in the case of a vehicle an import report in the Customs station, in such form and manner as may be prescribed] and the arrival manifest or import manifest or the import report or any part thereof, is not delivered to the proper officer within the time specified is satisfied that there was no sufficient cause for such delay, the person in charge or any other person referred to in this sub-section who caused such delay, shall be liable to a penalty not exceeding fifty thousand rupees; Provided that the Principal Commissioner of Customs or Commissioner of Customs may, in cases where it is not feasible to deliver arrival manifest or import manifest by presenting electronically, allow the same to be delivered in any other manner. (2) The person delivering the arrival manifest or import manifest or import report shall at the foot thereof make and sub....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... way of filling of present writ petition. 11. This Court vide order dated 09.05.2023 directed the respondents to let the goods of the petitioner be transferred from Mundra Port to Ludhiana Port. The petitioner was permitted to file manual bill of entry at Ludhiana. The Court observed as under:- "Learned counsel for the respondent has handed over a copy of letter dated 08.05.2023 from respondent No. 5 wherein Assistant Commissioner of Customs, MCD, Mundra Customs House was told to inform customer as well as to clear this cargo from Mundra without further delay as cargo is perishable in nature, line will not be responsible for any loss, cost or consequences in regard to said matter. Further as per Annexure P-2, the final delivery of the goods has been mentioned as Ludhiana. Since the respondent has not been able to correct the IGM, a direction is given to the respondents to let the goods of the petitioner be transferred from Mundra Port to Ludhiana Port. The petitioner shall file the Manual Bill of entry at Ludhiana." In terms of the order passed on 09.05.2023, the petitioner was allowed to take goods from custom areas of Mundra without insistence of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....toms. However, the respondents insisted that the fruits have been imported from Iran to which the respondents were directed to verify the Export Declaration Certificate issued by Dubai Customs. 16. On 06.07.2023, the Court directed the respondent nos. 1 to 4 to release the consignment of the petitioner forthwith and in the meanwhile conduct an enquiry with respect to certificate issued by United Arab Emirate, Federal Customs Authority, Dubai Customs. At the same time directions were given to return the containers in which the Kiwi fruits were lying. The respondents handed over an order dated 04.07.2023 passed by the Deputy Director (E), Plant Protection, Quarantine and Storage, RPQS, Amritsar, wherein it was ordered that the consignment/ container shall be deported within 10 days. However, this Court keeping in view the report dated 04.07.2023 issued by the lab website reflecting that the Kiwi fruit is free from infection of plant pathogen and pathogenic symptom directed respondent nos. 1 to 4 to release the consignment of the petitioner forthwith. 17. On 24.07.2023, the Court directed the department to accept bond and release the goods after accepting Rs. 20 lacs in cash whi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on that the Origin of "Kiwi" Fruits is from Iran instead of having been declared to have originated from "Chile". The Petitioner having placed on record the Export Declaration Documents issued by UAE Customs evidencing the Origin of goods as Chile, the goods imported by the Petitioner were thereafter detained by the respondent Customs Ludhiana. 22. Thereafter, the petitioner filed C.M. Nos. 10885-86-CWP of 2023 for placing on record documents as well as praying for joint inspection of the goods, since at the time of inspection of the containers it transpired that the imported "KIWI" had already deteriorated, due to passage of time and for the reasons that the containers in which the KIWI was stuffed was discharging water. The petitioner vide the said application had sought direction for joint examination and compensation in respect of the value of imported KIWI having been rendered unfit due to delay on the part of the respondents. 23. It is submitted by learned counsel for the petitioner that despite consistent orders of release having been passed by this Court the goods comprising of "KIWI" Imported in the month of May 2023 were finally released to the petitioner only on 01....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Act, it transpires that the proper Officer after recording his satisfaction may permit amendment or supplement the Import General Manifest. Since in the present case from the perusal of the Bill of Lading dated 16.04.2023 issued by respondent No.5 it was specifically mentioned that the Final Place of delivery of goods shall be "Ludhiana" the Respondent had erred in amendment of the Import General Manifest at the very first instance when the petitioner had requested for amendment vide email dated 24.05.2023. 27. It is further submitted that the Respondent Department has erred in appreciating that the goods imported by the petitioner were Perishable Food Items Comprising of "KIWI" which has limited shelf life, further the Act of the Respondent Customs in failure to amend the Import General Manifest is in the teeth of Section 30 (3) of the Act, which directs the Proper Officer to amend the Import General Manifest. Thus the perusal of the aforesaid provisions as well as directions issued by this Court in the interim orders passed from time to time demonstrate that the Respondents had failed to perform their duties in accordance with the provisions of Customs Laws. The Respondents ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... initiate action against the Shipping Company under the provisions of Section 30 of the Act, read with Regulation 11 of the Sea Cargo Manifest Regulations, 2020. 31. It is further submitted that the action of the respondent Shipping Company in filing wrong Import General Manifest is evident from the fact that the Respondent Shipping Company has placed on record annexure R5/3 which is an internal email communication dated 11.04.2023 and 12.04.2023, between the offices of the Shipping Company wherein it has been mentioned that the Final delivery shall be GRFL, ICD Sahnewal, Ludhiana INSGF6. 32. The delay in amendment of IGM and further filing of Manual/ Advance Bill of Entry for clearance of goods at Ludhiana was solely on account of Shipping Company as well as Customs Mundra who were not amending the Import General Manifest as evident from the emails dated 24.04.2024 wherein, it was advised that necessary amendments in IGM was to be carried out by Customs. Further the Shipping Company has referred to letter dated 19.05.2023 and 29.05.2023 wherein the Shipping Line had intimated that necessary amendments were to be carried out by the Customs Mundra, however due to delay in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xamination report issued vide Panchnamma dated 27.07.2023 reads as under:- "It was explained by the Customs Officers that undamaged goods i.e. Fresh Kiwi has to be released and for that the segregation of the consignments is mandatory. The representative of the importer, however submitted that the consignment may be released in toto and they undertook to dispose off the damaged kiwi as per law and will provide the disposal certificate to this effect." It is pertinent to mention that the Joint inspection was conducted pertaining to crates of Fresh KIWI stored in front of the container and inspection of Fresh KIWI was not conducted in respect of 100% material stored in all the containers. Thus evidencing that at the relevant point in time, 100% examination of the goods i.e. Fresh "KIWI" was not conducted by the respondent Customs Officers. 36. Since the petitioner had specifically lodged protest vide letter dated 07.07.2023 before depositing duty and the respondent in joint examination report dated 27.07.2023 had permitted the petitioner to file proof of disposal, the petitioner having provided the relevant documents along with photographs and videography, the petition....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... detained in a manner where the owner thereof has access to the same but is prevented by a prohibitory order from dealing with the same. The situation is radically altered when the owner of the goods no longer has access thereto and has no control over the same." Reliance is also placed on Rajesh Arora Vs Collector of Customs 1998 (101) ELT 246 (Del.) wherein this Court has held as under:- "11. Thus the customs department never disputed the fact that the car in question was being detained by them. If they were not detaining the car they would have immediately responded to the notices of the petitioners and said that the car was not being detained by them and the petitioners was free to take away the same. The customs authorities thus are trying to be clever and in order to overreach the Court have how taken the stand that they never detained the car. The fact remains that the car even when it was kept at the premises of Bagla was impounded and the petitioner in any case was deprived of its possession or custody. Moreover the respondents have themselves admitted in sub-para (D) of the submissions about brief facts of the case that S.P. Bagla submitted a letter dated 22nd....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rth Eastern Region, also passed an order on 26.02.2002, for releasing the goods and vehicle to the owner, which only reveals and reflects that the seizure was illegal. Indolence of the appellant authority in taking immediate necessary action to save the goods is writ large. Undeniably, the goods, in question, got damaged due to apathy on the part of the authority concerned. Apparently, if the goods would have been returned to the petitioner/respondent at the right earnest, in response to the direction issued by the learned single Bench of this Court, the goods would not have been damaged. Consequently, the respondent would not have suffered any loss. The loss suffered by the respondent is solely due to the irresponsible attitude of the appellant authority and blatant defiance of the direction issued by the learned Single Judge in WP (C) No. 3380 of 1999. 14. The grounds canvassed by the appellants counsel that the loss and damage to the goods was not caused due to the fault of the officers of the Department, but due to non-listing of the application filed by the Department, for clarification of the order passed in WP (C) No. 3380 of 1999, do not at all appeal to us. Howeve....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r destroyed the owner of the goods had no remedy in private law and the court was not empowered to pass an order or grant decree for payment of the value of goods. Public policy requires the court to exercise the power in private law to compensate the owner where the damage or loss is suffered by the negligence of officers of the State in respect of cause of action for which suits are maintainable in civil court. Since the seizure and confiscation of appellant's goods was not in exercise of power which could be considered to be act of State of which no cognizance could be taken by the civil court, the suit of the appellant could not be dismissed." 16. In State of Bombay (now Gujarat) v. Menon Mahomed Haji Hasam: AIR 1967 SC 1885, Hon'ble Supreme Court observed that "the power to seize and confiscate was dependent upon a customs offence having been committed or a suspicion that such offence had been committed. The order of the Customs Officer was not final as it was subject to an appeal and if the appellate authority found that there was no good ground for the exercise of that power, the property could no longer be retained and had under the Act to be returned to the owner.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... much less essential commodity. Therefore, if the commodity of the appellant which was seized became useless due to the negligence of the officers it ceased to be an essential commodity and the appellant was well within its rights to claim that since it was not possible for the authorities to return the essential commodity seized by them, it was entitled to be paid the price thereof as if the essential commodity was had been sold to the Government. The fiction of sale which is incorporated in sub-section (2) is to protect the interest of the owner of goods. It has to be construed liberally and in favour of the owner. The respondents were thus liable to pay the price of the Fertiliser with interest as directed by the Trial Court." 41. In Basavva Kom Dyamangouda Patil (SMT) Vs State of Mysore and Another (1977) SCC (Crl.) 598, the Supreme Court held as under:- "6. It is common ground that these articles belonged to the complainant/appellant and had been stolen from her house. It is therefore, clear that the articles were the subject matter of an offence. This fact, therefore, is sufficient to clothe the Magistrate with the power to pass an order for return of the property....
X X X X Extracts X X X X
X X X X Extracts X X X X
....antime the State Government had precluded itself from returning the property either by its own act or that of its agents or servants. This was precisely the cause of action on which the respondent's suit was grounded. The fact that an order for its disposal was passed by the Magistrate would not in any way interfere with or wipe away the right of the owner to demand the return of the property or the obligation of the Government to return it. The order of disposal in any event was obtained on a false representation that the property was an unclaimed property. Even if the Government cannot be said to be in the position of a bailee, it was in any case bound to return the said property by reason of its statutory obligation or to pay its value if it had disabled itself from returning it either by its own act or by any of its agents and servants. In these circumstances it is difficult to appreciate how the contentions that the State Government is not liable for any torturous act of its servants can possibly arise." 43. In Century Spinning and Manufacturing Company Ltd. Vs Ulhasnagar Municipal Council & Another (1970) 1 Supreme Court Cases 582, the Supreme Court held as under:- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....een completed because the goods had not been destroyed in presence of the proper officer. It is submitted that the application for refund under Section 26A of the Act has not been filed within the time line provided therein. The respondents by way of their written submission have also alleged that the phytosanitary certificate submitted by the petitioner is not genuine and is fabricated as they had received an email from Deputy Director, DRI, Nagpur, of the petitioner having imported Iranian origin Kiwi fruits. 47. Learned counsel for the respondents has also invited attention to provisions of Section 26A (3) of the Act to submit that no refund under sub-section (1) shall be allowed in respect of perishable goods and goods which have exceeded in their shelf life or their recommended storage before use period. Therefore, there was no occasion to permit refund of duty. He relies on B. Premanand and others vs Mohan Koikal and others 2011 (4) SCC 266. 48. Learned counsel for the respondents further submits that on 27.07.2023, when the joint inspection was done, the Kiwis which were damaged from 20 to 25% while the application under Section 26A of the Act has been moved alleging 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....which reflected 25% of the said goods have been completely damaged. 52. We find that the goods were ultimately released on 01.08.2023 and the certificate which has been placed on record reflects that the entire goods weighing 89,420 Kgs were found completely damaged and were rendered being unfit for human consumption. A certificate has been placed by the petitioner along with the written statement which has been taken on record. We are, therefore, constrained to find the lackadaisical approach adopted by the respondents, which has resulted in causing loss to the importer. It would, therefore, be a rule in the provisions of Section 26A (3) of the Act, which reads as under:- "26A. Refund of import duty in certain cases. (1 )Where on the importation of any goods capable of being easily identified as such imported goods, any duty has been paid on clearance of such goods for home consumption, such duty shall be refunded to the person by whom or on whose behalf it was paid, if- (a) the goods are found to be defective or otherwise not in conformity with the specifications agreed upon between the importer and the supplier of goods: Provided that the goods have....
X X X X Extracts X X X X
X X X X Extracts X X X X
....where the respondents have themselves created hurdles in the release of the perishable goods. While 100% custom duty is imposed for import of perishable goods, if the goods itself are damaged and become completely un-useable for human consumption, in our opinion, the same deserves to be refunded. Import of Section 26A (3) of the Act cannot be understood to allow unjust enrichment from a justified, bona fide importer. 53. Thus, from the above provisions of Section 26A (3) of the Act, it is apparent that the aforesaid Section does not allow refund of duty in respect of perishable goods and the goods which have exceeded their shelf life or where the goods are found to have been damaged. However, at the same time it does not deal with the situations, as have arisen in the present case. Obviously, as noticed above, the department has issued several circulars from time to time sensitizing the need to deal with the import goods expeditiously, which are perishable in nature. But we find that even after intervention of this Court directing the respondents to take action expeditiously, the officers have put a lot of obstacles and hurdles in the release of perishable goods resulting the go....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "Thus, to sum up, it is now a well accepted proposition in most of the jurisdictions, that monetary or pecuniary compensation is an appropriate and indeed an effective and sometimes perhaps the only suitable remedy for redressal of the established infringement of the fundamental right to life of a citizen by the public servants and the State is vicariously liable for their acts. The claim of the citizen is based on the principle of strict liability to which the defence of sovereign immunity is nor available and the citizen must revive the amount of compensation from the State, which shall have the right to be indemnified by the wrong doer. In the assessment of compensation, the emphasis has to be on the compensatory and not on punitive element. The objective is to apply balm to the wounds and not to punish the transgressor or the offender, as awarding appropriate punishment for the offender, as awarding appropriate punishment for the offence (irrespective of compensation) must be left to the criminal courts in which the offender is prosecuted, which the State, in law, is duty bound to do, That award of compensation in the public law jurisdiction is also without prejudice to an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....esent and omnipotent but controlled and guided by that refined yet flexible censor called judicial discretion. This nidus of power and process, which master-minds the broad observance throughout the Republic of justice according to law, is Article 136." 21. While discussing award of 'just compensation' in a personal injury case, this Court in K. Suresh v. New India Assurance Co. Ltd. (2012) 12 SCC 274 had the occasion to observe that: "10. It is noteworthy to state that an adjudicating authority, while determining the quantum of compensation, has to keep in view the sufferings of the injured person which would include his inability to lead a full life, his incapacity to enjoy the normal amenities which he would have enjoyed but for the injuries and his ability to earn as much as he used to earn or could have earned. Hence, while computing compensation the approach of the Tribunal or a court has to be broad based. Needless to say, it would involve some guesswork as there cannot be any mathematical exactitude or a precise formula to determine the quantum of compensation. In determination of compensation the fundamental criterion of "just compensation" should be inhe....