TaxTMI 
TaxTMI 
2026 (2) TMI 552
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....on fine under Section 125 of the Customs Act, 1962; B) Quash and set aside the consequential Order-in-Appeal dated 17.01.2024 passed by the Commissioner of Customs (Appeals), whereby the Petitioner's appeal was dismissed solely on limitation, without consideration on merits; C) Direct the Respondent Authorities to grant the Petitioner the statutory option of redemption of the confiscated goods on payment of appropriate redemption fine in lieu of absolute confiscation under Section 125 of the Customs Act, 1962, as per law; D) Quash and set aside the penalty of Rs.30,00,000/- imposed under Section 112(a)(i) of the Customs Act, 1962, being arbitrary, excessive, and imposed without any finding of intent, suppression, or mens rea; E) Direct the Respondent Authorities to permit the Petitioner to physically inspect the seized goods either in person or through an authorized representative, under proper supervision, so as to verify the condition and quality of the goods and to facilitate fair adjudication; F) Direct the Respondent Authorities to issue a Detention, Demurrage, and Warehousing Charges Waiver Certificate in respect of the Petitioner'....
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....from the Additional Director General, Risk Management Centre for Customs (RMCC), Mumbai, indicating that certain importers were allegedly misclassifying areca nuts to circumvent the Minimum Import Price ("MIP" hereinafter) conditions applicable to areca nuts. 6. CRCL issued its Test Report No. CRCL/21/972(1) dated 22.01.2021 in respect of Bill of Entry No. 9396149 and Test Report No. CRCL/21/973(1) dated 25.01.2021 in respect of Bill of Entry No. 9829340. The said reports record that the samples were in the form of brown coloured WHOLE ARECA NUTS with defective and broken pieces, did not contain additives such as catechu, lime, or tobacco, and did not meet the moisture content requirement for ARECA NUTS as per IS:16962:2018. The reports further stated that the samples were "other than betel nut product known as 'supari' as mentioned in Supplementary Note 2 of Chapter 21 of the Customs Tariff. 7. Upon receipt of the CRCL reports, the petitioner made repeated written representations seeking re-testing or re-analysis of the samples. On 12.02.2021, the petitioner submitted a detailed clarification in response to departmental correspondence dated 09.02.2021, enclosing a certificat....
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.... petitioner's grievance, in the present petition, is confined to the direction of "absolute confiscation" of the imported goods and the "denial of the statutory option of redemption under Section 125 of the Customs Act, 1962". The petitioner does not dispute the classification as determined in the Order-in-Original. Having been left without an efficacious alternative remedy due to dismissal of the statutory appeal on limitation, the petitioner filed the present Writ Petition seeking directions of setting aside of the impugned order to the extent they direct absolute confiscation without offering redemption. Submissions on behalf of the petitioner 12. Mr. Pradeep Jain, learned counsel appearing on behalf of the petitioner submits that it is a bona fide importer, engaged in the lawful business of import and trading of betel nuts, primarily boiled betel nuts, sourced from Indonesia. The petitioner submits that it holds a valid IEC and has consistently imported such goods through declared channels, supported by valid commercial invoices, phytosanitary certificates, and health certificates issued by the competent authorities of the Republic of Indonesia. 13. The imports were no....
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....of confiscation. The impugned Order-in-Original does not record any finding that the goods were prohibited goods under any statute, notification, or policy. On the contrary, the record shows that the goods were imported through declared channels, warehoused under Section 49, and accompanied by valid certificates. 17. The petitioner submits that absolute confiscation is an extreme measure reserved for prohibited or hazardous goods. In the present case, neither the Show Cause Notice nor the Order-in-Original records any finding of prohibition, fraud, suppression, or mens rea. Despite this, the adjudicating authority ordered absolute confiscation without recording reasons for denying the statutory option of redemption, rendering the order arbitrary and contrary to law. 18. The petitioner further submits that the penalty of Rs.30,00,000/- under Section 112(a)(i) has been imposed without any finding of wilful misstatement, suppression of facts, or intent to evade duty. The imports were openly declared, supported by documents, and subjected to examination and testing by the Department itself. 19. The petitioner submits that it preferred a statutory appeal before the Commissioner....
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.... the present case inasmuch as the petitioner was granted an opportunity of personal hearing and the same was duly attended by the authorized representative of the petitioner as well as the written submissions were also considered as is depicted in the Order-in-Original. 25. Further, it is clear from the bare reading of the Order-in-Original that the petitioner's conduct crystallizes an unlawful attempt, to import goods by cleverly flouting rules of prohibition qua the goods in question, by furnishing incorrect description of their goods as 'Boiled Betel Nuts' and deliberately misclassifying. Moreover, to justify the said misclassification vide their written submission dated 04.08.2021, the petitioner falsely placed reliance on a ruling which was no longer legally valid as the same was overruled and much before 04.08.2021. 26. As regards the petitioner's plea for redemption, it is submitted that the option of redemption under Section 125 is not an absolute right, particularly where the goods are held to be prohibited or restricted under the applicable law. Section 125(1) of the Customs Act uses the expression "may", vesting discretion in the adjudicating authority. In the pres....
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....ions 111(d) and 111(m), and penalty under Section 112(a)(i) of the Customs Act, 1962. 32. The Order-in-Original dated 24.09.2021 reclassified the goods as Areca Nuts under CTH 0802 80 10, held the goods to be prohibited in view of the Minimum Import Price (MIP) condition of Rs.251 per kg, ordered absolute confiscation, and imposed a penalty of Rs.30,00,000/-. 33. The Order-in-Original records detailed reasons in paragraphs 42 to 49 for denying redemption, including deliberate misdeclaration on the petitioner's instance, import of prohibited goods, and an attempt to circumvent the MIP/CIF condition. For reference, paragraph nos. 42 to 49 of the Order-in-Original are as follows: "42. In view of the above statutory provisions read with Section 3(2) of the FTDR Act, 1992, the power to modify/amend, from prohibited to restricted and from restricted to free or otherwise regulating in all cases of import/export, is vested only with the Central Government and not with any quasi-judicial authority. Further in terms of Section 3(3) of the FTDR Act, 1992 when read with Section 11 and Section 111 of the Customs Act, 1962 the goods under reference imported at declared value of Rs....
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....velopment and Regulation) Act, 1992 read with Section 11 of the Customs Act 1962, the imported goods covered under BE No. 9396149 dated 31.10.2020 and 9829340 dated 04.12.2020 becomes prohibited for import. Therefore, once the imported goods have become prohibited goods the same shall be dealt as per law for the time being in force. 46. I thus find that the importer rather than placing reliance on the statutes governing classification as provided in the Customs Act, 1962, they preferred to rely on Advance Authority Rulings and supplier's documents. I see this as a well thought out plan and deliberate attempt on the part of the importer to hoodwink the Department by mis-declaring the description and seeking inappropriate classification under CTH 2106 to circumvent the scope of levy of duty based on minimum import price fixed by the government for the import of Areca Nut read with DGFT Notification No. 20/2015-20 dated 25.07.2018. This DGFT notification is in public domain from July, 2018. And the import has been made almost two and half years later. From the discussions above it becomes abundantly clear that unless they inappropriately classified the goods under CTH 210....
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.... supra in the case of M/ s Ayush Buisness Overseas. In view of the above Discussion & Findings, I proceed to Order as Follows: ORDER 1. I reject the claimed classification of the impugned goods i.e. Boiled Betel Nuts Supari declared under CTH 21069030 imported vide Bill of Entry 9396149 dated 31.10.2020 and 9829340 dated 04.12.2020, at a declared assessable value Rs. 4510687.50/- and Rs. 6807037.50/- respectively at ICD Patli and order for re-classifying the same under CTH 08028010 as Areca Nuts/Betel Nuts. 2. The imported goods of assessable value Rs. 4510687.50/- and Rs. 6807037.50/- with CIF value of Rs. 83.50 and Rs. 84.04 per kg are absolutely confiscated for having been imported in violation of the provisions of Section 46 of Customs Act, 1962 and DGFT Notification NO. 20/2015-20 dated 25.07.2018 read with Section 3(2) of Foreign Trade (Development and Regulation) Act, 1992 and Section 11 and Section 111(d) & (m) of the Customs Act, 1962. 3. I impose a penalty of Rs. 30,00,000/- (Rupees Thirty Lacs Only) under Section 112(a) (i) of the Customs Act, 1962 on the importer M/s Bhagwan Corporation for their acts of omission and commission for renderin....
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....e petitioner has not laid any challenge to the finding of the appellate authority on limitation. No pleadings, grounds, or arguments advanced assail the correctness or legality of the order rejecting the appeal as time-barred. The grounds argued by the petitioner before the Commissioner (Appeals) qua limitation were rejected being bereft of any merits. In the absence of any such challenge now, the order of the Commissioner (Appeals) has attained finality. 42. It is well settled that writ jurisdiction under Article 226 of the Constitution is discretionary and equitable, and unexplained delay and laches disentitle a litigant to relief. Further, it is trite law that a party who allows a statutory order to attain finality cannot be permitted to indirectly assail the same by invoking the extraordinary jurisdiction under Article 226 of the Constitution. The writ court is not intended to function as a substitute for a statutory appellate forum. The said principle was also observed by the Hon'ble Supreme Court in Thansingh Nathmal v. Supdt. of Taxes, 1964 SCC OnLine SC 13, relevant paras of which are as under: "7. Against the order of the Commissioner an order for reference cou....
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....whereby it was held that a person who is indolent and negligent in pursuing remedies cannot invoke the discretionary and equitable jurisdiction of this Court under Article 226. Relevant paragraph of the said judgment is as under: "16. Thus, the doctrine of delay and laches should not be lightly brushed aside. A writ court is required to weigh the explanation offered and the acceptability of the same. The court should bear in mind that it is exercising an extraordinary and equitable jurisdiction. As a constitutional court it has a duty to protect the rights of the citizens but simultaneously it is to keep itself alive to the primary principle that when an aggrieved person, without adequate reason, approaches the court at his own leisure or pleasure, the Court would be under legal obligation to scrutinize whether the lis at a belated stage should be entertained or not. Be it noted, delay comes in the way of equity. In certain circumstances delay and laches may not be fatal but in most circumstances inordinate delay would only invite disaster for the litigant who knocks at the doors of the Court. Delay reflects inactivity and inaction on the part of a litigant - a li....
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....olation and deliberate misclassification, and for denying redemption. No case of perversity, lack of jurisdiction, or violation of natural justice is made out to warrant interference under Article 226. 48. The ancillary reliefs sought, namely waiver of warehouse charges and demurrage, retesting of goods, and setting aside or reduction of penalty, are entirely consequential and intrinsically linked to the validity of confiscation and penalty imposed under the Order-in-Original. 49. Once the confiscation and penalty have attained finality, no independent consideration of these issues arises. The Customs Act provides specific appellate mechanisms for challenging penalty quantification and confiscation, and writ jurisdiction cannot be converted into a surrogate appellate forum to bypass the statutory provisions, legislative intent and objective of prohibiting import of certain goods. 50. The record further shows concurrent findings by the Customs Preventive authorities, including directions dated 25.11.2020, the Modus Operandi Circular, and the report of ADG (RMCC), Mumbai, regarding widespread misclassification of boiled betel nuts to evade MIP/CIF conditions. The petitioner'....