Madras High Court
M/S.Al Qahir International vs The Commissioner Of Customs on 23 August, 2021
W.P.(MD)No.13790 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 23.08.2021
CORAM
THE HON'BLE MR.JUSTICE R.SURESH KUMAR
W.P.(MD)No.13790 of 2021
in
WM.P.(MD)No.10763 of 2021
M/s.Al Qahir International,
Represented by its Managing Partner,
Shri Shihad. ... Petitioner
/Vs./
1.The Commissioner of Customs,
New Custom House, New Harbour Estate,
Tuticorin – 628 004.
2.The Deputy Director,
Directorate of Revenue Intelligence,
22/14, Celin Garden,
Roche Colony, South Beach Road,
Tuticorin – 628 001. ... Respondents
Prayer: Writ Petition filed under Article 226 of Constitution of India, to
issue a Writ of Certiorarified Mandamus, calling for the records of the
impugned proceedings in C.No.VIII/48/64/2021-SIIB dated 26.07.2021
issued by the first respondent and quash the same and consequently
direct the first respondent to release the Black Pepper provisionally
under Section 110A of the Customs Act, 1962; imported by the
Petitioner vide Bills of Entry 3655257/21.04.2021; 3649935/21.04.2021;
3649146/21.04.2021; 3718109/26.04.2021; 3746469/28.04.2021;
3656537/21.04.2021; 3655260/21.04.2021; and 3655555/21.04.2021 and
quash the same.
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W.P.(MD)No.13790 of 2021
For Petitioner : Mr.Vijay Narayan
Senior Counsel
for Mr.B.Sathish Sundar
For Respondents : Mr.B.Vijay Karthikeyan
Standing Counsel
ORDER
The prayer sought for herein is for a Writ of Certiorarified
Mandamus, calling for the records of the impugned proceedings in
C.No.VIII/48/64/2021-SIIB dated 26.07.2021 issued by the first
respondent and quash the same and consequently direct the first
respondent to release the Black Pepper provisionally under Section 110A
of the Customs Act, 1962; imported by the Petitioner vide Bills of Entry
3655257/21.04.2021; 3649935/21.04.2021; 3649146/21.04.2021;
3718109/26.04.2021; 3746469/28.04.2021; 3656537/21.04.2021;
3655260/21.04.2021; and 3655555/21.04.2021.
2.It is the case of the petitioner that, the petitioner is a partnership
firm registered under the Indian Partnership Act. It is engaged in the
business of importing and trading spices. It has placed orders for
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purchase of pepper (Black Pepper) of Sri Lankan Origin from various
exporters in Sri Lanka. In furtherance of the said purchase orders, the
pepper had been exported from Sri Lanka under various bills of lading
against the notified quantity on various dates between 10.04.2021 and
27.04.2021.
3.The said consignments reached the Tuticorin Port in April 2021
and it is in the custody and control of the first respondent Customs
Department. In this regard, according to the petitioner, he had provided
all the documents to the customs Department for releasing of the goods,
as the Black Pepper imported by the petitioner is not a prohibited goods,
since the price of the Black Pepper is above Rs.500/- per kg. Therefore,
as stipulated under the Foreign Trade Policy adopted by the Central
Government, these goods cannot be treated as a prohibited goods.
Therefore, after collecting necessary customs duty, the goods in question
shall be released by the respondent Department. However, since they
have not released the same and they seized the goods on the alleged
reason that the goods are prohibited on the pretext that the price rate per
kg is not above Rs.500/-, but it is below Rs.500/-. Therefore, as per the
notification No.21/2015-2020, dated 25.07.2018, issued by the Director
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General of Foreign Trade (DGFT), Department of Commerce, Ministry
of Commerce and Industry, these goods in question, which is Black
Pepper, according to the respondent, is a prohibited item. Therefore, on
that ground, they have not released the goods.
4.Only in that context, the petitioner, in order to release the goods
in question, had made an attempt by filing a writ petition before this
Court in W.P.(MD)No.9516 of 2021, where, an interim order of direction
was also sought for in W.M.P.(MD)No.7249 of 2021. Considering the
said plea made in the Miscellaneous Petition, a learned Judge of this
Court, by order dated 27.05.2021, has passed the following interim order:
7.In the above circumstances, this Court is
inclined to grant an Ad Interim Direction, directing
the respondents to provisionally release the goods
imported to the petitioner on the following
conditions:-
''(i)The petitioner shall deposit a sum of Rs.
50,00,000/- (Rupees Fifty Lakhs only) before the
second respondent and he has to execute a bond for
a sum of Rs.6,00,00,000/- (Rupees Six Crores only)
before the second respondent.
(ii)The petitioner shall not alienate or alter
the goods.
(iii)The products should be kept safe
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somewhere within the local jurisdiction of the
respondents.
(iv)The place of the storage of the products
has to be intimated to the respondents.
(v)The respondents are directed to complete
the enquiry within a period of two weeks from the
date of receipt of copy of this order.
(vi)The petitioner shall produce the above
said products as and when required, by the
respondents.
(vii)If any of the aforesaid conditions are
violated, this order automatically stands cancelled.''
5.Felt aggrieved over the said stringent condition imposed by the
Writ Court in passing the aforesaid interim order, the petitioner preferred
an intra-Court appeal in W.A.(MD)No.1156 of 2021. The said writ
appeal was heard and decided by the Division Bench of this Court, by
order dated 22.06.2021, wherein the Division Bench has held as follows:
“10.In our considered view, it will be too
early for us to examine the aspects now placed
before us by the appellant as well as the
Department, because, there is a Clear dichotomy
between the request made by the appellant before
us for provisional release and the investigation,
which is now being conducted by the DRI. The
appellant cannot mix up both, as both are
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independent to each other.
11.In any event, if a request is made by the
appellant for provisional release before the
Competent Authority, the Competent Authority is
required to take a decision in the matter. As we
pointed out earlier, there is no formal request made
by the appellant for provisional release of the cargo
and the representation dated 13.05.2021 given to
the DRI is for release of the cargo and cannot be
construed as an application for provisional release.
12.Therefore, we are of the considered view
that the prayer sought for in the writ petition is not
maintainable or rather has to be taken to be
premature, considering the facts of the case, since
the Revenue states that the import of black pepper
into India, which is valued below Rs.500/- is
prohibited taking into consideration the welfare of
the agriculturists and it is alleged by the DRI that
the imports had been effected by the appellant by
inflating the invoice value. We do not propose to
render any opinion on these issues as we are
convinced that the appellant should approach the
Commissioner of Customs, Tuticorin, with a proper
request for provisional release, which the
Competent Authority will consider in accordance
with law.
13.We make it clear that the direction which
we propose to issue in this writ appeal will in no
manner have any impact on the investigation done
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by the DRI.
14.The learned Counsel appearing for the
appellant submitted that identical import was
effected through the Chennai Port, which was also
investigated by the DRI, Bengaluru, who have given
No Objection Certificate for clearance of the goods
If that is so, it will be well open to the appellant to
place copy of such an order for consideration of the
Commissioner of Customs, Tuticorin, while filing
the application for provisional release.
For the above reasons, the Writ Appeal is
allowed and the interim direction issued in the Writ
petition is set aside. Consequently, the writ petition
stands disposed of by directing the appellant to file
a proper application for grant of provisional
release of the cargo along with their submissions as
well as the documents which they propose to rely
upon and the Commissioner of Customs, Tuticorin,
shall fix the date for personal hearing, preferably,
through video conferencing, since the appellant is
stated to be a permanent resident of State of
Kerala. After the conclusion of the personal
hearing, the Commissioner of Customs, Tutricorin,
shall pass orders on the application of provisional
release within a period of ten days thereafter. No
costs.”
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6.Pursuant to the said direction given by the Division Bench of
this Court, the petitioner has made an application to the respondents for
the provisional release of the goods in question. The said application
having been considered was rejected through the impugned order dated
26.07.2021 by the respondent Customs Department, as against which, the
present writ petition has been filed.
7.Mr.Vijay Narayanan, learned Senior Counsel representing
Mr.B.Sathish Sundar, learned counsel appearing for the petitioner has
made two fold submissions. Firstly, the learned counsel appearing for
the petitioner would submit that, insofar as the goods in question is
concerned, it was imported with bill of lading, where the quantity has
been clearly demarcated and price has also been declared, according to
which, the price of goods in question is rupees more than Five Hundred
per kilogram. The rate fixed for each of the consignment as per kilogram
in INR is Rs.525 to Rs.533 per kg. That is how, all the eight
consignments were imported. Therefore, the learned Senior Counsel
would submit that, as per the notification No.21/2015-2020 dated
25.07.2018 issued by the DGFT, Black Pepper garbied with Exim Code
09041130 and Black Pepper ungarbied with Exim Code 09041140 are
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prohibited items, provided, the import is free, if the CIF is above Rs.500
per kg. Therefore, from the said notification, it has become clear that,
once CIF of the goods referred to is above Rs.500/- per kg, it is
importable and it is not covered under the prohibited items as per the
notification.
8.Therefore, citing the said notification, the learned Senior
Counsel would contend that, since the rate of each of the consignment
imported by the petitioner has been clearly stated, which is ranging from
Rs.525 to 533 per kg, certainly, it is above Rs.500 per kg, therefore, it is
free to be imported. As such, the respondent Customs have no right to
retain the goods, hence, the goods in question should have been released.
9.However, since the Customs Department has raised a doubt that
if the rate of the goods in question might have been escalated by the
importer and on that basis, if they want to make any adjudication by
issuing show cause notice, certainly, it is open for them to do that
exercise, however, it would take a reasonable time of a few months or a
year or more normally in completing this kind of adjudication.
Therefore, till such time, if the goods in question are kept idle, definitely,
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the goods would get wasted, at the time of completion of the
adjudication. Therefore, only in that circumstances, after having
considered the nature of the goods in question, which were imported by
the petitioner, the Division Bench, while ordering the Writ Appeal filed
by the petitioner as referred to above, has permitted the petitioner to
make an application to the respondent seeking for provisional release of
the goods in question. Accordingly, when such an application was made,
the same has been rejected through the impugned order unmindful of the
rate having been declared, for which, bill of lading and other relevant
documents having been submitted by the petitioner to the respondent
Customs Department. Therefore, the impugned order is liable to be
interfered with and the provisional release of the goods shall be ordered,
he contended.
10.The second submission of the learned Senior Counsel
appearing for the petitioner is that, when exactly a similar issue has been
confronted by the Writ Court of the Principal Seat in a very recent
judgment dated 14.07.2021 by a similar exporter of the same or identical
goods, that is pepper, the Customs Department had raised an issue that it
may be a prohibited goods and the rate would have been escalated and
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therefore, after adjudication, if it is to be declared as prohibited goods,
then the question of releasing the goods does not arise, as redemption
option to be given to the importer is the absolute discretion of the
Customs authorities under Section 125 (1) of the Customs Act
[hereinafter referred to as 'Act' for short] and therefore, the goods in
question cannot be released even as provisional release, which was the
contention raised by the customs Department before the Principal Seat of
this Court in the said writ petition filed by a similar importer in
M/s.Global Metro vs. The Commissioner of Customs and others in
W.P.No.12454 of 2021.
11.The learned Senior Counsel would further contend that the Writ
Court, after having considered the said case and counter case projected
by the importer as well as the Customs Department has ultimately come
to the conclusion that, the said decision can be made as to whether the
goods in question involved in that case is a prohibited goods or not, only
after adjudication is completed. Therefore, at this juncture, that is,
before adjudication process, since the goods in question is perishable and
edible goods, the same can be released by way of provisional release and
in that view of the matter, the Writ Court has passed the following order
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in the said writ petition.
“12.I am given to understand by the learned
Senior Standing Counsels for the Customs
Department as well as for the DRI that the process
of investigation would take some time and cannot
be hurried.
13.The commodity in question is agricultural
produce. The variety of black pepper imported is
stated to be specific to the region of Srilanka, an
important ingredient in the making of spices used in
Indian cuisine, with a short shelf life. Assuming for
the sake of argument that investigation is concluded
in favour of the petitioner, if the provisional release
is not granted, the entire consignments would have
been compromised. The balance of convenience
would thus require, in my considered view, that the
consignments be released, subject to the petitioner
being put to terms. This would also ensure that the
interest of the Department are securely protected.
The petitioner will remit the entire duty and furnish
bond to the satisfaction of the Assessing Authority
in regard to interest payable, penalty or charges
that may be deemed necessary.
14.The impugned order is set aside. It is
made clear that nothing contained in this order will
stand in the way of an independent enquiry by the
authorities in the on-going investigation. The
Deputy Commissioner of Customs/R3 is directed to
quantify the duty and bond amounts and
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communicate the same to the petitioner forthwith
and release the goods within a week of such
remittance by the petitioner.
15.On the issue of waiver of demurrage
charges, the issue is left open to be pursued before
the authorities in the light of applicable Rules and
Regulations.”
12.By relying upon the aforesaid recent judgment of the principal
seat of this Court passed in the similar circumstances, the learned Senior
Counsel would vehemently contend that, as against the said order since
no appeal has been filed by the Customs Department and in fact the order
has been accepted and acted upon by the Customs Department, the same
benefit should be extended to the petitioner herein also on the same terms
and conditions and therefore, this view can be taken by the very same
Customs Department, which confronted with the petitioner for similar
import, which taken place at Tuticorin port.
13.By making these two fold submissions, the learned Senior
Counsel appearing for the petitioner seeks indulgence of this Court
against the impugned order of rejection made by the respondent dated
26.07.2021 and seeks consequential direction to the respondents to
release the goods by way of provisional release with conditions.
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14.Per contra, Mr.B.Vijay Karthikeyan, learned Standing Counsel
appearing for Customs Department, by relying upon the averments made
in the counter affidavit and also various other documents filed in support
of his contention by way of typed set of documents, would contend that,
the very notification dated 25.07.2018 was issued by DGFT putting the
Black Pepper as a prohibited item, but giving a concession that, if such
Black Pepper is worth about more than Rs.500/- per kg as CIF, then it is
importable, because, in order to streamline the local market, where if low
priced pepper is freely permitted to be imported to India, that will have a
negative impact in the market economy. By which, the local producers,
ie., the agriculturalists of the local pepper would get affected. In order to
save the local agriculturalists, who produce the Black Pepper at various
parts of this country, this kind of prohibition has been imposed by DGFT
through the notification dated 25.07.2018. When such a notification was
issued and it is in force, no pepper with the value of less than Rs.500 per
kg be permitted to be imported to Indian soil, as it is definitely a
prohibited goods. If it is a prohibited goods, the only way out for the
importer is, ofcourse after adjudication, to re-export the same, after
paying penalty under various provisions of the Act.
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15.In this regard, the learned Standing Counsel would further
submit that, insofar as the redemption option for such kind of goods is
concerned, as provided under Section 125 (1) of the Act, it is mandatory
to give such an option to the importer to redeem the goods concerned,
after paying the redemption fine, only if it is not prohibited for import.
However, if it is a prohibited item, such kind of option need not be given
to the importer, as it is only directory under Section 125(1) of the Act to
give such an option to the importer.
16.He would also further enlarge his arguments stating that, in
view of the latest judgment of the Hon'ble Supreme Court made in Civil
Appeal No(s).2217 - 2218 of 2021 in the matter of Union of India and
others vs. M/s.Raj Grow impex LLP and others [2021-TIOL-187-SC-
CUS-LB], the right of the importer to get release of the prohibited goods
either as a final release or provisional release is completely denuded.
17.Further elaborating the said arguments, the learned counsel
appearing for the respondents would contend that, in the said case, the
Hon'ble Supreme Court confronted the similar situation, where, pulses
and spices were imported by various importers at Mumbai, as against
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which, Customs Department, though after adjudication, by the order in
original has directed to release the goods, subsequently, the appellate
authority, having reversed the order, has not permitted the import of the
goods, either to get release of the goods or to redeem the same and when
this action was questioned by the importer before the Bombay High
Court, those writ petitions were allowed as against which, matter has
gone to the Supreme Court, where, the Supreme Court, after having
analyzed the matter in detail, has come to the conclusion that, the view
taken by the Bombay High Court in this regard was not acceptable and
therefore, the order in original passed by the customs authorities, initially
allowing the goods to be released was set aside and the order passed by
the appellate authority reversing the order of the original authority was
upheld. By relying upon this judgment heavily, the learned Standing
Counsel appearing for the respondents would submit that, the
observations made at various places in the said judgment would
strengthen the stand of the Customs Department that the goods which are
prohibited cannot be expected to be released either by way of provisional
release or final release even after adjudication and the only option
available is to re-export the same, after paying penalty.
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18.When that is the legal position, the learned Standing Counsel
would contend that, in the case in hand, since certainly the goods in
question imported by the petitioner is a prohibited goods, though that can
be ascertained to be declared as such, only after adjudication which
formally has to be undertaken by the respondent Customs Department,
the goods in question if it is released now by way of provisional release,
that would go contra to the law declared by the Hon'ble Supreme Court
in the aforesaid case in Raj Grow impex as by the time if such
declaration has come after adjudication that the goods in question are
prohibited goods, then, there would be no availability of the goods to
absolutely confiscate and permit the importer to re-export the same, after
paying penalty. By thus, the very purpose of prohibition by way of
notification of DGFT dated 25.07.2018 would get defeated. That is the
reason why the Customs Department, forecasting the same, has rejected
now the plea of the petitioner to release the goods, by way of provisional
release, through the impugned order. Hence, the learned Standing
Counsel would seek sustainment of the impugned order and submits that
it does not require any interference from this Court.
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19.I have considered the said rival submissions made by the
learned counsel appearing for the parties and have perused the materials
placed before this Court.
20.There is no dispute that the petitioner is having licence to
import and he has admittedly imported eight consignments of Black
Pepper from Sri Lanka, which is the originating country and it had been
imported through the Tuticorin port. The same has been intercepted and
it has been seized on the ground allegedly that the goods imported is a
prohibited goods, in view of the notification dated 25.07.2018 of DGFT.
21.Though an initial attempt was made by the petitioner to release
the cargo by seeking for an interim order, though the learned Judge
permitted to release the goods by way of interim order, since some
stringent conditions were imposed, as against which, the petitioner
himself has filed an Intra-Court Appeal as referred to above. In Intra-
Court Appeal, in W.A.(MD)No.1156 of 2021, the Division Bench of this
Court by order dated 22.06.2021, though set aside the interim order
passed by the Writ Court permitting the petitioner to get release of the
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goods, ofcourse with stringent conditions, however, has given liberty and
permission to the petitioner to make a separate application to the
respondent Customs Department to get the goods released by way of
provisional release, for which, according to the Division Bench of this
Court, no earlier application had been filed by the petitioner.
22.It is to be noted that, as against the said Division Bench order,
no appeal had been filed by both parties and infact, the judgment had
been accepted and acted upon by both, as the petitioner had made
application to the respondent customs department for getting the goods
released by way of provisional release. That application submitted by
the petitioner now has been rejected through the impugned order dated
26.07.2021.
23.Therefore, the fact remains insofar as this case is concerned,
that, pursuant to the order of the Division Bench of this Court referred to
above, the petitioner had made an application for provisional release of
the goods concerned. Having entertained such application, the same was
rejected by the respondent customs on merits, that is the impugned order
herein. Therefore, one thing has become clear that, it is not the stand of
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the Customs authorities while passing the impugned order that, the
petitioner does not have even the right of making application seeking
provisional release of the goods before adjudication commences.
However, now the stand has been taken by the respondent Customs, as
has been vehemently contended and projected by the learned Standing
counsel for the respondent that, even the right of making application to
get the provisional release of the goods, if it is a prohibited one, does not
arise, as per the Hon'ble Supreme Court orders referred to above in Raj
Grow Impex case.
24.In this context, it is the stand of the Customs Department to
state that, if ultimately after adjudication, the Customs Department
comes to the conclusion that the goods in question is a prohibited goods
and in that case, in the meanwhile if by way of provisional release an
importer gets the goods released and sell it in the market, there would be
no chance for the Customs Department to confiscate the same and to
permit the petitioner to re-export the same, after paying the penalty, as
that is the term indicated by the Hon'ble Supreme Court in the said case.
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25.However, the fact remains that, in the present case insofar as
the goods in question is concerned, according to the Counsel for the
petitioner, it is not a prohibited goods. Because, the rate of consignment
per kg is above Rs.500/-. It is a fact that if it is above Rs.500/-, certainly,
it is not a prohibited goods. Whether it is above Rs.500/-, or less than
Rs.500/-, is the matter for adjudication, as the same cannot be decided
either by customs Department or by this Court at this juncture, without
having a full-fledged adjudication, for which necessary procedure is to
be adopted and followed.
26.During the course of arguments, when a question was posed to
the Customs Department that, whether, within a shortest possible time
ie., within few weeks, this kind of adjudication would be possible for the
customs Department, the answer was not in the affirmative. That means
the Customs Department will certainly take a reasonable time to
complete the adjudication.
27.Herein the case in hand if at all the Customs Department feels
that it is definitely a prohibited goods, as the rate would have been
enhanced or escalated, certainly on these aspects, documents should be
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collected from the exporter from the originating country and after
collecting those documents and related documents to establish that the
importer has purchased the goods only with a lesser value, that is less
than Rs.500/- per kg, the adjudication can be completed successfully by
the Customs Department to come to a conclusion that the goods in
question is a prohibited goods.
28.Instead, if ultimately, the Customs Department is not able to
establish their stand by proven documents to show that the goods in
question have been imported with the price lesser than Rs.500, certainly
the Customs Department will have no other option, except to release the
goods, as if it is more than Rs.500 per kg, hence it is a permitted goods
and not a prohibited goods, even according to the notification dated
25.07.2018. In that eventuality or in the meanwhile, certainly, as alleged
by the learned Senior Counsel appearing for the petitioner, the goods in
question would get wasted, because, it is no doubt a perishable or edible
goods, that is, Black Pepper and its self life itself is for a limited period,
within which if it is not marketed or put in use, absolutely, the entire
value of the goods will go down or it may not be fit for human
consumption at one point of time. Therefore, in order to meet these kind
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of circumstances, whether a provisional release is permissible or not is
the question here.
29.In this context, it is not the definite case of the Customs
Department, even after quoting the judgment of the Hon'ble Supreme
Court referred to above dated 17.06.2021 in Raj Grow Impex case that,
such kind of right of importer even to make an application to get a
provisional release is not available with importer. The fact situation is
that, the importer has definitely got a right to make an application to get
provisional release of the goods concerned, depending upon the nature of
the goods. If it is edible goods or perishable goods, certainly, that kind
of right would always be available to the importer to make an application
to get it released by way of provisional release. This has been
recognized by the Division Bench of this Court in the order referred to
above dated 22.06.2021. That is the reason why, such permission was
given to the petitioner to make application to the Customs Department
for provisional release of the goods.
30.No doubt, that the application having been entertained, has
been rejected by the Customs Department through the impugned order on
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the reason that, the rate quoted by the petitioner for imported
consignment is certainly an escalated figure and it is not a real figure.
On that ground, they have rejected. Whether it is an escalated figure or a
real figure cannot be finally adjudicated at this juncture, without having
completed the adjudication process, which is admittedly yet to be
commenced.
31.More over, the learned Senior Counsel appearing for the
petitioner has contended that, in respect of Raj Grow Impex Case, dated
17.06.2021, predominantly, it relates to the order passed by the Bombay
High Court, where the goods in question having been seized or kept in
custody, was adjudicated and after adjudication, though original
authority passed an order in favour of the importer, subsequently, the
appellate authority has reversed the order that it is a prohibited goods,
therefore, it is liable to absolute confiscation. Only in that
circumstances, whether the interference made by the Bombay High Court
was to be accepted or not was the prime question that triggered the
Customs Department to file the SLP before the Hon'ble Supreme Court,
where such findings have come. Therefore, in the present case, since
adjudication is yet to be commenced and at this juncture, it cannot be
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conclusively decided that the goods in question is only prohibited goods,
the balance of convenience certainly is in favour of the petitioner.
Hence, in these circumstances, the right of getting provisional release is
always available with the importer. That is the reason why, the right has
been recognized by the Division Bench of this Court, where permission
was given to the importer to make application for provisional release.
Therefore, the learned Senior Counsel would contend that the judgment
in Raj Grow Impex case may not stand in the way, in view of the facts of
the present case. This argument of the learned Senior Counsel for
petitioner is to be accepted.
32.According to the learned Senior counsel, the issue raised in this
writ petition is exactly covered by the order passed by the Writ Court in
the Principal Seat of this Court referred to above in M/s.Global Metro
case, dated 14.07.2021, where, the learned Judge passed an order giving
direction to release the goods provisionally and relevant portion has
already been quoted hereinabove.
33.The said order was, according to the learned Senior Counsel,
having been accepted by the Customs Department, had been acted upon.
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This factor is not controverted by the Customs Side. It was the
contention raised by the learned Standing Counsel appearing for the
Customs Department that, if these kind of importers are permitted to
import the prohibited goods and ultimately after adjudication, even
though it comes to the conclusion that the goods in question are
prohibited goods, if it is the case, where the goods in question cannot be
made available for re-exporting, as indicated by the Hon'ble Supreme
Court in Raj Grow Impex Case, these kind of importers would again
involve in such kind of activity of importing prohibited goods, therefore,
each and every occasion, the Customs Department would be put in
trouble to go for full-fledged adjudication to establish the case that the
particular consignment imported by the importer is prohibited goods.
34.Insofar as the said contention raised by the Customs
Department is concerned, since these aspects has not been sofar agitated
before any Court of law, this Court feels that, this kind of unscrupulous
import, if finally adjudicated by the Customs Department that they
imported only the prohibited goods, certainly will be a serious issue, and
in that case as has been held, it is an issue between the commercial
advancement of individual importer vs. National interest at large.
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W.P.(MD)No.13790 of 2021
35.The reason being that, the restrictions made through the
notification dated 25.07.2018 by the DGFT is only to regulate the local
and domestic market, where if large quantity of these kind of goods are
kept in the local market, certainly, that will have a negative impact.
Thereby, local agricultural producers who produce these kind of goods
will get definitely affected. Only in order to protect the local
agriculturalists, these kind of restrictions are being made by the
Government of India through the DGFT. That is the reason why, these
restrictions have come that if you are importing the low priced black
pepper, certainly that will have an impact in the market. Therefore, in
order to maintain equilibrium and to prohibit these kind of importers who
again and again make the mistakes by importing the prohibited goods,
certainly some stringent measures can be taken with the aid of the
Foreign Trade (Development and Regulation) Act, 1992, under which,
the import-export licence is given by the DGFT and the same can very
well be suspended, if any contravention is noticed by the licence issuing
authority. In this context, this Court wants to quote Section 8 of the
Foreign Trade (Development and Regulation) Act, 1992, which reads
thus:
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W.P.(MD)No.13790 of 2021
“8 Suspension and cancellation of Importer-
exporter Code Number:
[(1) Where?
(a) any person has contravened any of the
provisions of this Act or any rules or orders made
thereunder or the foreign trade policy or any other
law for the time being in force relating to Central
excise or customs or foreign exchange or has
committed any other economic offence under any
other law for the time being in force as may be
specified by the Central Government by
notification in the Official Gazette; or
(b) the Director-General or any other
officer authorised by him has reason to believe that
any person has made an export or import in a
manner prejudicial to the trade relations of India
with any foreign country or to the interests of other
persons engaged in imports or exports or has
brought disrepute to the credit or the goods of, or
services or technology provided from, the country;
or
(c) any person who imports or exports
specified goods or services or technology, in
contravention of any provision of this Act or any
rules or orders made thereunder or the foreign
trade policy,
the Director-General or any other officer
authorised by him may call for the record or any
other information from that person and may, after
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W.P.(MD)No.13790 of 2021
giving to that person a notice in writing informing
him of the grounds on which it is proposed to
suspend or cancel the Importer-exporter Code
Number and after giving him a reasonable
opportunity of making a representation in writing
within such reasonable time as may be specified in
the notice and, if that person so desires, of being
heard, suspend for a period, as may be specified in
the order, or cancel the Importer-exporter Code
Number granted to that person.]
(2) Where any Importer-exporter Code Number
granted to a person has been suspended or
cancelled under sub-section (1), that person shall
not be entitled to import or export any goods or
services or technology except under a special
licence, granted, in such manner and subject to
such conditions as may be prescribed, by the
Director-General to that person.”
36.Therefore, if at all the Customs Department finds with
documents to substantiate that the goods in question having been
imported by the petitioner is prohibited goods within the meaning of
25.07.2018 notification issued by DGFT, apart from taking a decision of
declaring the goods as prohibited goods and imposing penalty etc., they
can also make a strong recommendation to the DGFT to initiate action
against the importer under the provisions of Foreign Trade (Development
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W.P.(MD)No.13790 of 2021
and Regulation) Act, 1992, especially under Section 8 referred to above
and to allow the same to reach its logical conclusion. As it is a drastic
decision to be taken by the Foreign Trade Department with the
recommendation of Customs Department in any given case, where the
documents are rightly available with the customs department, this Court
feels that some check and balance measure can be ensured to be placed
as against these kind of importers.
37.Under these circumstances, this Court feels that, since the right
of the petitioner to get provisional release of the goods concerned is not
taken away and in fact, this has been reiterated in a similar circumstances
by the Hon'ble Supreme Court in an interim order which has been very
recently passed on 11.08.2021 in SLP No.7565 of 2021 which has arisen
out of W.A.No.690 of 2021 dated 04.03.2021 from this Court, that kind
of right cannot be completely curtailed by any authority. Therefore, once
such application is made by the importer for releasing the goods by way
of provisional release on the ground that the goods are perishable or
edible goods, certainly, it should be taken into account and considered
and accordingly, the provisional release shall be made by the Customs
Department with the conditions to be imposed in this regard.
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W.P.(MD)No.13790 of 2021
38.In this context, the earlier order passed by the learned Judge
referred to above in similar circumstances in M/s.Global Metro case, can
very well be followed in the present case also. Accordingly, I am of the
view that this writ petition can be disposed of with the following order:
(i)that the impugned order is set aside for
the reasons discussed above and in view of the
same, the respondent is hereby directed to pass
orders for releasing the goods in question by way
of provisional release ofcourse by imposing the
following conditions:
that the petitioner shall pay the entire
customs duty and also to execute a bank
guarantee for interest, penalty or charges that
may be charged and in this context, the
respondent before passing such order for
provisional release, shall quantify the amount,
which may be imposed by way of penalty and
charges etc., on the petitioner and equal to that
amount, the bank guarantee shall be obtained
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W.P.(MD)No.13790 of 2021
from the petitioner and after getting the same, the
goods in question shall be released by way of
provisional release.
(ii)Further, this Court wants the
respondent Customs Department to complete the
adjudication process at the earliest, for which,
the petitioner shall cooperate without taking any
unnecessary adjournments and after completing
the adjudication process at the earliest, within a
reasonable time, ultimately if the Customs
Department comes to a conclusion that the goods
in question are prohibited goods, within the
meaning of notification dated 25.07.2018, the
needful as per law shall be undertaken by the
Customs Department. That apart, the Customs
Department shall also make a recommendatory
report to the DGFT to initiate action against the
petitioner within the meaning of Section 8 of the
Foreign Trade (Development and Regulation)
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W.P.(MD)No.13790 of 2021
Act, 1992. The needful as indicated above to
pass orders of making provisional release of the
goods concerned shall be undertaken within a
period of one week from the date of receipt of a
copy of this order.
(iii)It is further made clear that, insofar as
the claim to be made with regard to the waiver
charges, it can be considered separately in
accordance with law.
39.With these directions and observations, this Writ Petition is
ordered accordingly. No costs. Consequently, connected Miscellaneous
Petition is closed.
23.08.2021
Index : Yes/No
sm
Note : In view of the present lock down owing to
COVID-19 pandemic, a web copy of the order may
be utilized for official purposes, but, ensuring that
the copy of the order that is presented is the correct
copy, shall be the responsibility of the
advocate/litigant concerned.
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W.P.(MD)No.13790 of 2021
R.SURESH KUMAR ,J.
sm
Order made in
W.P.(MD)No.13790 of 2021
Dated:
23.08.2021
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