TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 402
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.... for the parties. 2. Rule. The rule is made returnable immediately at the request of and with the consent of the learned counsel for the parties. 3. This Petition, apart from seeking action against the sixth Respondent, seeks the release of goods covered under Bill of Entry No. 3375923, dated 19 July 2025, comprising approximately 56 tons of dry dates. 4. The record shows that after the Bill of Entry was filed on 19 July 2025, the Customs Authorities, by exercising the powers vested in them under Section 47 of the Customs Act, cleared the goods by issuing an Out of Charge ('OOC') order on 24 July 2025, at 19.23 hours. The record prima facie shows that during the period between 19 July 2025 and 24 July 2025, due verification was carried out by the Customs Authorities. Besides, the OOC was issued after a release order was made on 24 July 2025 by the Ministry of Agriculture and Farmers Welfare, Government of India, and a No-Objection Certificate for clearance of imported food was issued by the Food Safety and Standards Authority of India on 19 July 2025 itself. 5. The Petitioner, upon payment of the entire assessed customs duty of Rs. 6,30,361.7/- was issued a gate pass - ....
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....ation of the supply contract entered into by the Petitioner with its suppliers. The documentation about the cancellation is pleaded and annexed along with the Petition. 8. The Petitioner has pleaded about a detailed representation addressed on 26 July 2025, to the customs officials, detailing the actions of the sixth Respondent post the release of the imported goods from the jurisdiction and the authority bounds of the Customs, urging inter alia, some action against the sixth Respondent. The Petitioner has pleaded that, despite the receipt of such representation, no steps were taken by any of the Respondents to redress the Petitioner's grievance. 9. The Petitioner has also pleaded about the full cooperation extended by the Petitioner to the DRI officials in the context of their allegations that the imported goods had in fact originated in Karachi (Pakistan) and not from Dubai (UAE). However, despite such cooperation, based upon the illegal and highhanded actions of the sixth Respondent, the released dry dates, which were forced to be brought back, were not being released. The Petitioner has instituted this Petition seeking the relief referred to hereinabove. 10. The sixth ....
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....yansh Logistics was telephonically contacted and requested to bring back the containers to the aforesaid CFS. Later in the evening of 25.07.2025, it was informed over the phone by the representative of the Customs Broker that the vehicles carrying the aforesaid two containers had arrived at the Gate of the CFS. 6. Accordingly, vide E-mail dated 25.07.2025 (Annexure-B), the Deputy Commissioner, Import Docks, and M/s JM Bakshi and logistics Pvt Limited, CFS were requested to allow the containers inside the CFS for further necessary actions under Custom Act, 1962. 7. In view of above, it is respectfully submitted that the petitioner's claim that the containers were brought back to the CFS in order to show that the goods never left the premises is hereby denied in toto, as all telephonic communications and e-mail correspondences were duly made with the concerned stakeholders to bring back the Pakistani Origin goods contained in those two containers for necessary actions under Customs Act, 1962." 12. Upon reviewing the averments in the Writ Petition and the sixth Respondent's response, we form the impression that there is prima facie merit in the factual allegat....
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....e that the sixth respondent was not acting out of any ulterior motives or for any extraneous considerations, still, the ends cannot always justify the means. Particularly, when exercising writ jurisdiction, this Court is concerned with the decision-making process rather than the ultimate decision. Any alleged absence of mala fides is no substitute for acting contrary to the law or legal procedures. 18. The Respondents, by filing their affidavits in this matter, have relied on the provisions of Sections 47 and 106 of the Customs Act to justify the actions of the sixth Respondent. Section 47 provides that where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting the clearance of the goods for home consumption. 19. In this case, the goods were sought to be imported by filing a Bill of Entry dated 19 July 2025. The proper officer in this case, presumably, upon recording satisfaction that the goods were not prohibited goods, and after recovering the customs....
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....ts referred to Section 106 of the Customs Act, which deals with the power to stop and search conveyances. Even here Section 106 provides that where the proper officer has reason to believe that any aircraft, vehicle or animal in India "has been, is being, or is about to be", used in the smuggling of any goods or in the carriage of any goods which have been smuggled, he may at any time stop any such vehicle, animal or vessel or, in the case of an aircraft, compel it to land, and rummage and search any part of the aircraft, vehicle or vessel, examine and search any goods in or over them, break open the lock of any door or package for exercising the powers conferred by clauses (a) and (b), if the keys are withheld. Section 106(2) also gives the proper officer powers to use all lawful means for stopping any vehicle or animal, and where such means fail, the vehicle or animal may also be fired upon. 25. The actions of the sixth Respondent do not fall within the scope of Section 106 of the Customs Act. In this case, the goods had already been cleared by the customs authorities themselves. Their clearance orders have not been revoked, either through legal procedures or otherwise. The pe....
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....he exercise of their power by the law. 30. In this case, at least one statutory functionary, after examining the bill of entry and all accompanying documents and NOCs for nearly 6-7 days, cleared the goods by issuing a statutory order under Section 47. If this order was found wanting due to subsequent intelligence or for any other reason, there are sufficient provisions under the Customs Act to revise or stay such an order. However, here, the sixth respondent, by disregarding the statutory order, failing to adhere to natural justice, and not making any contemporaneous record of the alleged satisfaction, has exercised powers that did not even prima facie authorise him to do what he has done. 31. Mr Singh submitted that there are several legislations, such as the Prevention of Money Laundering Act, 2002 (PMLA), which require the Proper Officer to record their reasons in writing before undertaking a search or seizure. He submitted that Section 106 of the Customs Act does not require reasons to be recorded in writing. Such a blanket proposition cannot be readily accepted. 32. As noted earlier, the action of the sixth Respondent does not fall within the scope of Section 106 of ....
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....to appreciate how these goods were cleared within two to three weeks of the clearance of the disputed dry dates. 36. Mr Singh and Mr Apte explained that, in respect of the two further Bills of Entry, since no intelligence had been received indicating that the dry dates had originated from Karachi (Pakistan), no action was taken. They submitted that this shows the bona fides of the Customs Authorities. Mr Kantawala countered by submitting that there was something more than what meets the eye in the action of the 6th respondent. 37. Though we cannot and we do not wish to stretch the record, we cannot ignore that there are detailed rules governing the verification of the country of origin for imported goods. None of the provisions of these rules appears to have been followed at least up to now. There is a procedure for overcoming a clearance order made under Section 47, i.e., instituting a Revision or adopting such other lawful procedures, which would include at least a notice and an opportunity to respond. None of these legal provisions was resorted to in this case. 38. Mr Singh did show us a document from UAE Customs, in which one of the endorsements suggests that the goods....
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....ad been addressed. 42. At this stage, it is not for this Court to comment on whether any imported dry dates were of Pakistani origin and therefore, attracted the prohibition in the Notification. However, once the goods were cleared after the making of an examination order and after permissible verification of this aspect, we believe that some semblance of the observance of legal procedure, not to mention compliance with natural justice, was essential before the goods were brought back into the CFS based on the flurry of phone calls to customs brokers and transporters by the Sixth Respondent allegedly "requesting" the customs brokers and transporters to bring back such cleared goods. 43. Mr. Kantawala did try to point out the certificate of origin issued by the Dubai (UAE) Chamber of Commerce, which is at page No.28 of the Petition. He also referred to the certificate of fumigation, which is at page No.29 of the Petition. He also referred to the Phytosanitary Certificate issued by the UAE bearing a QR code, which is on page No.30 of the Petition. He pointed out that there is no allegation of document falsification or that the ultimate document issued by the UAE Authorities was....
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....are given an opportunity to issue a show cause notice to the Petitioner within four weeks from today and further directed that this show cause notice be disposed of within six weeks of the receipt of the Petitioner's response. 48. Suppose the above exercise is not completed within the timeline now indicated by us. In that case, the Respondents must release the detained goods by determining the tentative redemption fine and requiring the Petitioner to furnish a bank guarantee to secure the same. 49. We recognize that the Customs Authorities are not obliged to release the prohibited goods upon payment of a redemption fine, but discretion is granted to the Customs Authorities to even release such goods. This discretion must undoubtedly be exercised judicially and not arbitrarily. This case concerns dry dates and not some prohibited items such as narcotics, etc. The only concern regarding dry dates is their possible origin, which might be from Pakistan. The Customs Authorities are certainly entitled to enforce this prohibition, but they cannot take the law into their own hands or unreasonably delay proceedings so that the goods spoil. As noted earlier, there are rules and procedu....