Madras High Court
M/S.Al Qahir International vs The Commissioner Of Customs on 22 December, 2021
W.A(MD)No.1782 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 22.12.2021
CORAM:
THE HONOURABLE MRS.JUSTICE PUSHPA SATHYANARAYANA
AND
THE HONOURABLE MR.JUSTICE P.VELMURUGAN
W.A(MD)No.1782 of 2021
M/s.Al Qahir International,
Represented by its Managing Partner,
Shri Shihad, 13/489, A.Kumara Nellur,
Thrissur District, Kerala. ... Appellant / 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- 628 004. ... Respondents/Respondents
Prayer: Writ Appeal filed under Clause 15 of the Letters Patent,
against the order dated 23.08.2021 in W.P(MD)No.13790 of 2021.
For Appellant : Dr.S.Krishnakandh for
Mr.B.Sathish Sundar
For R-1 & R-2 : Mr.B.Vijay Karthikeyan
1/12
https://www.mhc.tn.gov.in/judis
W.A(MD)No.1782 of 2021
JUDGMENT
PUSHPA SATHYANARAYANA, J.
The Writ Appeal is directed against the order dated
23.08.2021 made in W.P(MD)No.13790 of 2021.
2. The writ appellant is a partnership firm registered under the
Indian Partnership Act, engaged in the business of importing and
trading in spices. The appellant had placed orders for purchase of
Black Pepper of Sri Lankan origin from various exporters in Sri
Lanka. Pursuant to the purchase orders, the pepper had been
exported from Sri Lanka under the Bills of Lading in 18 number in
the quantity notified therein. The consignments reached Tuticorin
port in April, 2021 and are in control of the first respondent
Customs Department. The appellant also submitted all the required
documents for clearance of the said Black Pepper and undertook to
pay the statutory duty leviable on the goods imported by them.
According to the appellant, import of Black Pepper is not prohibited
by any Law for the time being in force. However, despite submitting
all the relevant documents and necessary Bills of Lading and Bills of
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W.A(MD)No.1782 of 2021
Entry, the imported goods have not been cleared. All those
documents that were required to be produced by the respondents
were also submitted. However, the goods have not been cleared
and the delay in clearance of goods have caused serious prejudice
and irreparable loss to the appellant.
3. To be noted is that the consignments carrying the very
same commodity had been cleared by the respondents and other
custom Houses in the country. As the respondents are denying the
clearance of the containers of the appellant, they are forced to pay
demurrage charges. Besides the above said difficulties, the imported
goods being agricultural produce would result in spoilage if not
cleared at the earliest as they are perishable. The appellant also
filed the Bills of entry in discharge of their obligation under Section
46 of the Customs Act, 1962. As the commodity was intended for
home consumption, on submission of the Bills of Entry, the
respondents are duty bound to clear the same under Section 37 of
the Customs Act 1962. Hence, the appellant approached this Court
by filing W.P(MD)No.9516 of 2021 along with
W.M.P(MD)No.7249 of 2021 seeking direction for provisional release
of goods imported by the appellant. The said interim direction
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W.A(MD)No.1782 of 2021
mandated the appellant to deposit Rs.50,00,000/- before the
second respondent and execute a bond for a sum of Rs.
6,00,00,000/- before the second respondent with other conditions.
Aggrieved by the said order, a writ appeal in W.A(MD)No.1156 of
2021 was filed by the appellant herein, which was also disposed of
on 22.06.2021 by allowing the writ appeal and setting aside the
interim direction issued by the Writ Court. The appellant was
directed to file a proper application for grant of provisional release
of the Cargo along with relevant documents before the
Commissioner of Customs, Tuticorin, and after affording an
opportunity of hearing to the appellant, an order shall be passed by
the Commissioner of Customs Tuticorin on the application of
provisional release within a period of ten days thereafter.
Accordingly, an application was made by the appellant on
02.07.2021 for provisional release of the imported Black Pepper
seized by the Directorate of Revenue Intelligence (DRI), Tuticorin.
After hearing the appellant, an order was passed by the first
respondent on 26.07.2021 rejecting the request of provisional
release of the goods, which constrained the appellant to file
W.P(MD)No.13790 of 2021. An order came to be passed on
23.08.2021 by the Writ Court by imposing the following conditions:
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W.A(MD)No.1782 of 2021
“(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 of course 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 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) 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
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W.A(MD)No.1782 of 2021
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.”
4. Aggrieved by the said order passed by the learned Single
Judge, the above writ appeal is preferred by the appellant.
5. Heard the learned counsel appearing on either side and
perused the materials available on record.
6. The learned counsel appearing for the appellant would
contend that they were ready to remit the statutory duty imposed
for the goods and furnish a bond to the satisfaction of the Assessing
Authority with respect to the interest payable, penalty or charges
that may be deemed necessary. The appellant is only aggrieved by
the direction to furnish a bank guarantee equivalent to the interest,
penalty and other charges.
7. The learned counsel appearing for the appellant placed
reliance on a case decided by the Principal Bench of this Court in
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W.A(MD)No.1782 of 2021
M/s.Global Metro case in W.P.No.12454 of 2021, wherein only a
bond was directed to be furnished and bank guarantee was not
insisted. Therefore, it was contended that the Writ Court ought to
have followed the same lines which was agreeable to the
respondents, however directed the appellant to produce bank
guarantee instead of executing a bond. Therefore, the only
contention of the learned counsel appearing for the appellant was
that the order under challenge deserves to be set aside and the
respondents may be directed to accept the bond instead of bank
guarantee with regard to the interest, penalty and charges as had
been ordered by the Principal Bench in M/s.Global Metro case.
8. Even otherwise, it is pointed out that seizure of the goods
imported was based on the reason that the appellant had admitted
the overvaluing of goods so as to overcome the prohibition imposed
in respect of the said good as per the Trade notification dated
25.07.2018, wherein Black Pepper is prohibited from import if the
import value is less than Rs.500/- per kg. It is pointedly argued by
the learned counsel for the appellant that the investigation by the
DRI is still in progress and no charges have been levied as against
the appellant herein for any violation or any show cause notice been
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W.A(MD)No.1782 of 2021
issued in this regard. Therefore, without the quantification, directing
the appellant to furnish bank guarantee would be premature and
any delay in quantifying by following the procedure would lead to
deterioration of the quality of the goods imported making it unfit for
human consumption.
9. The respondents have refused to release the goods as the
appellant had overvalued the import of Black Pepper to overcome
the notification. The overvaluing of the goods has been done by the
appellant in order to render the Black Pepper freely importable.
Now, the only question arises for consideration is whether the
release of goods provisionally in terms of 110A of the Customs Act
in respect of the said goods can be issued. It is only valuation of
the goods is in question as import of the goods valuing less than Rs.
500/- per kg.,is prohibited.
10. The learned counsel for the respondents pointed out that
totally the value declared by the importer in respect of imported
Black Pepper as per the Bills of Entry was Rs.6,44,80,013/- with
unit price in the range of Rs.525/ to Rs.523/- per kg(CIF).
The re-determined value in respect of the above Bills of
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W.A(MD)No.1782 of 2021
Entry by the Department worked out to
Rs.3,60,74,557/- with the unit price in the range of Rs.287/- to
Rs.304/- per kg. Therefore, it was argued that provisional release
of the goods can be made under Section 110(A) of the Customs Act
1962 and the guidelines issued by CBIC circular, as per the value
declared by the importer for execution of bond and furnishing of
bank guarantee since the case has not been adjudicated and hence,
the value re-determined in the show-cause notice cannot be taken.
11. In the light of the above submissions made by the
respective counsels and even the fact that the final adjudication is
yet to be done, we are of the opinion that the respondents are
directed to quantify the duty and bond amount and communicate
the same to the appellant and release the goods within a week on
such remittance by the appellant. The appellant would remit the
entire duty if not remitted already and furnish the bond to the
satisfaction of the respondents in regard to the interest payable,
penalty or charges that may be deemed necessary.
12. To make it clear, we modify the condition imposed by the
Writ Court to furnish bank guarantee to furnish a bond to the same
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W.A(MD)No.1782 of 2021
value. So far as the adjudication is concerned, the authorities are
to proceed with the same without being influenced by this order as
this order does not express any opinion in that regard.
13. Excepting the above modification, the order passed by the
learned Single Judge in all other aspects shall stand confirmed.
14. The writ appeal is disposed of accordingly. No Costs.
[P.S.N.,J] [P.V.,J.]
22.12.2021
Index :Yes/No
Internet :Yes/No
pm
Copy to:
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- 628 004.
https://www.mhc.tn.gov.in/judis
W.A(MD)No.1782 of 2021
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.
https://www.mhc.tn.gov.in/judis
W.A(MD)No.1782 of 2021
PUSHPA SATHYANARAYANA,J.
and
P.VELMURUGAN,J.
pm
JUDGMENT MADE IN
W.A(MD)No.1782 of 2021
22.12.2021
https://www.mhc.tn.gov.in/judis
