Madras High Court
The Commissioner Of Customs vs M/S. Sri Shunmuga Traders on 7 November, 2022
W.A(MD) Nos.935 to 941 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 07.11.2022
CORAM:
THE HONOURABLE MR.JUSTICE R.MAHADEVAN
and
THE HONOURABLE MR.JUSTICE J.SATHYA NARAYANA PRASAD
W.A(MD) Nos.935 to 942 of 2022
and
C.M.P(MD) Nos.7747, 7749 to 7754, 7756, 8835 to 8837, 8939,
8943 to 8946 of 2022
1.The Commissioner of Customs,
Custom House,
New Harbour Estate,
Tuticorin – 628 004. ... Appellant-1/Respondent-1
2. The Joint / Additional Commissioner
of Customs (Imports),
Custom House,
New Harbour Estate,
Tuticorin – 628 004. ... Appellant-2/Respondent-2
-vs-
1. M/s. Sri Shunmuga Traders,,
Represented by its Partner T. Manoharan,
2G/385, Backialakshmi Nagar,
Tuticorin - 628 008. ... Respondent-1/Petitioner
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W.A(MD) Nos.935 to 941 of 2022
2. The Deputy Director,
Directorate of Revenue Intelligence,
22/14, Celin Garden, Roche Colony,
South Beach Road,
Tuticorin - 628 001. ... Respondent-2/Respondent-3
Prayer: Writ Appeals filed under Clause 15 of Letters Patent, against the
order dated 07.07.2022 made in W.P(MD) Nos.12887, 13643, 12888,
12887 and 13644 of 2022.
For Petitioner : Mrs.R.Hemalatha
Senior Standing Counsel
assisted by Mrs.S.Ragaventhre,
(in all Writ Appeals)
For Respondents : Mr.A.K.Jayaraj for R1
(in all Writ Appeals)
COMMON JUDGMENT
(Judgment of the Court was made by R.MAHADEVAN, J.)
Aggrieved over the order dated 07.07.2022 passed by the Writ
Court in W.P(MD) Nos.12887, 13643, 12888, 12887 and 13644 of 2022.
the official respondents in the said writ petitions, have come up with
these writ appeals.
2. The aforesaid writ petitions were filed by the first respondent /
writ petitioner for issuance of a Writ of Mandamus, directing the
appellants herein to release the 338 bags (27.04 MTs) of Betel Nut
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W.A(MD) Nos.935 to 941 of 2022
product known as Supari (unflavoured supari) of Myanmar Origin
imported vide Bill of Entry No.7556557 dated 18.02.2022, classifiable
under CTH 21069030 which was assessed and totally valued at USD
40560/- (CNF) for 27.04 MTs and further to direct the appellants herein
to issue Waiver Certificate for Detention and Demurrage charges under
Regulation of Handling of Cargo in Customs Area Regulations, 2009.
The Writ Court after hearing both sides allowed the writ petitions by
separate order dated 07.07.2022.
3. The learned Senior Standing Counsel appearing for the
appellants submitted that the first respondent / petitioner in all the cases
had filed their respective Bills of Entries for import of Betel nut product
known as 'Supari (unflavoured supari)' classified under Customs Tariff
heading (CTH) 21069030 and country of origin declared as 'Myanmar'
with a CIF value of Rs.114/Kg (approximate). However, the intelligence
gathered by the Directorate of Revenue Intelligence (DRI) indicated that
the importers had misdeclared the description of the imported goods and
misclassified the same in the import documents under CTH 21069030,
when the actual imported goods were whole/split Areca nuts, classifiable
under CTH 080280, which is a prohibited item for import under DGFT
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W.A(MD) Nos.935 to 941 of 2022
Notification No.20/2015-2020 dated 25.07.2018, if CIF value is below
Rs.251/- per Kg. Therefore, the petitioners' consignments had been de-
stuffed from the containers and moved to Public Bonded Warehouses by
the petitioners under Section 49 of the Customs Act, 1962, for safe
storage and to avoid container detention charges. She further submitted
that during the preliminary examination of the above said consignments,
representative samples were drawn by the shed officers of customs and
forwarded to Custom House Laboratory, Chennai, for testing through
DRI. During examination of the said goods, by the officers of SIIB,
Custom House, Tuticorin, in the presence of officers of DRI, Tuticorin, it
was found that in the place of the declared goods Betel nut product
known Supari (unflavouredsupari), falling under CTH 21069030, the
bags contained areca nut in whole/split form', classifiable under CTH
080280, stuffed in gunny bags. The officers further found that the value
declared for the imported goods in the respective Bills of Entry were less
than the value of Rs. 251/kg fixed by DGFT, thus prohibited for import.
Accordingly, the above mentioned import consignments of Areca nuts
were seized under Section 110 of the Customs Act, 1962, vide Mahazar
Proceedings dated 26.05.2022, but without considering the same, the
Writ Court has erroneously allowed the writ petitions. Thus, she would
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W.A(MD) Nos.935 to 941 of 2022
pray for allowing these appeals.
4. Learned counsel for the first respondent / writ petitioner in all
the cases submitted that series of orders have been made by this Hon'ble
Court, directing the authorities to release the seized goods pending
adjudication and in support of his submissions, he has placed reliance on
the decision of a Division Bench of this Court in W.A(MD) Nos.863 of
2020 and batch cases, [Union of India v. M/s.Black Gold
Technologies], wherein, this Court after taking into consideration the
judgment of the Hon'ble Supreme Court reported in 2019 (365) E.L.T.
465 (S.C.) [Commissioner of Customs v. Atul Authomations Pvt. Ltd.]
has held as follows:-
“25.The learned counsel for the appellant/revenue has
drawn the attention of this Court to pages 19 to 21 of the
typed set of documents, which contain the de-stuffed items
of the imported goods and made an attempt to point out that
those imported items are without cut either on the bead wire
or no two cuts are available. However, this Court is not
inclined to go into the said aspect for the reason that it
involves factual adjudication and any finding rendered in this
regard may affect the Revenue or the respondent/importer.
26.The Hon'ble Apex Court in Atul Automations Pvt.
Ltd. case (supra) had dealt with the aspect relating to
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W.A(MD) Nos.935 to 941 of 2022
prohibition/restriction of goods and in paragraph No.9
observed as follows:
"9.Unfortunately, both the Commissioner and the
Tribunal did not advert to the provisions of the Foreign
Trade Act. The High Court dealing with the same has aptly
noticed that Section 11(8) and (9) read with Rule 17(2) of
the Foreign Trade (Regulation) Rules, 1993 provides for
confiscation of goods in the event of contravention of the
Act, Rules or Orders but which may be released on
payment of redemption charges equivalent to the market
value of the goods. Section 3(3) of the Foreign Trade Act
provides that any order of prohibition made under the Act
shall apply mutatis mutandis as deemed to have been made
Under Section 11 of the Customs Act also. Section 18A of
the Foreign Trade Act reads that it is in addition to and not
in derogation of other laws. Section 125 of the Customs
Act vests discretion in the authority to levy fine in lieu of
confiscation. The MFDs were not prohibited but restricted
items for import. A harmonious reading of the statutory
provisions of the Foreign Trade Act and Section 125 of the
Customs Act will therefore not detract from the
redemption of such restricted goods imported without
authorisation upon payment of the market value. There
will exist a fundamental distinction between what is
prohibited and what is restricted. We therefore find no
error with the conclusion of the Tribunal affirmed by the
High Court that the Respondent was entitled to redemption
of the consignment on payment of the market price at the
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W.A(MD) Nos.935 to 941 of 2022
reassessed value by the customs authorities with fine
Under Section 112(a) of the Customs Act, 1962."
5. Referring to the Notification No.20/2015-2020, dated
25.07.2018, at page 35 of the typed set of papers (Vol – 1) filed by the
first respondent/writ petitioner, the learned counsel for the first
respondent / writ petitioner in all the cases further submitted that since
the aforesaid notification states that the import of arecanut over and
above CIF Rs.251/- per kilogram is free and import below CIF Rs.251/-
is prohibited, this Court, after taking note of the aforesaid notification,
directed the adjudicating authority to dispose of the applications of the
petitioners for provisional release of commodities under Section 110A of
the Customs Act. In support of his submission, the learned counsel for
the first respondent / writ petitioner placed reliance on a decision of the
Division Bench of this Court in W.P(MD) Nos.11942 of 2022 and batch
cases, [M/s.Blue Vista International Ltd., v. The Commissioner of
Customs], wherein, this Court held as under:-
“8. In terms of Notification No.20/2015-2020 dated
25.07.2018, the Director General of Foreign Trade has held
that all products falling under Chapter-8 are freely
importable subject to the condition that the import value is
Rs.251/- and above per kilogram CIF. Admittedly, the
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W.A(MD) Nos.935 to 941 of 2022
commodities in all consignments in the present cases, are
valued at less than Rs.251/- per kg. Thus, and assuming that
the commodities in question were held to fall under the
sweep of Chapter 8, they would be categorised as ‘prohibited
goods’ as per Notification No.20/2015-2020.
...
20. It is pursuant to the above order, that order dated
07.05.2022 has come to be passed releasing the
consignments of the goods in question, in that case. Thus, in
light of the discussion as above, all petitioners are permitted
to make applications for provisional release under Section
110A and such applications as/if and when received shall be
disposed by the adjudicating authority after hearing the
petitioners and simultaneous with a prima facie
determination of the classification of the commodity in each
case, within a period of two (2) weeks from date of receipt of
the applications.”
Hence, the learned counsel for the first respondent / writ petitioner
submitted that the Writ Court has rightly allowed the writ petitions and
directed for release of the goods following the plethora of judgments in
this regard.
6. We have heard the submissions made by the learned counsel for
the appellants / respondents 1 and 2 and the learned counsel for the first
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W.A(MD) Nos.935 to 941 of 2022
respondent / writ petitioner and perused the materials available on record.
7. On a perusal of the Notification No.20/2015-2020, dated
25.07.2018, it appears that if the declared import value is less than Rs.
251/- per kilogram, the import of Arecanut is prohibited and thus, the
Adjudicating Authority after taking note of the aforesaid notification
comprehensively, has issued a show cause notice No.88/2022, dated
05.08.2022 to the appellants / respondents 1 and 2.
8. However, considering the submissions of the learned counsel on
either sides and also taking into consideration the judgments of the Apex
Court as well as the earlier judgments of this Court, the appellants/
respondents 1 and 2 are directed to consider the applications of the first
respondent / writ petitioner in all these cases for provisional release
under Section 110-A of the Customs Act and the same shall be disposed
of by the Adjudicating Authority on merits and in accordance with law,
within a period of one (1) week from the date of receipt of a copy of this
judgment.
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W.A(MD) Nos.935 to 941 of 2022
9. With the above directions, these writ appeals stands disposed of.
No costs. Consequently, connected miscellaneous petitions are closed.
[R.M.D., J.] [J.S.N.P., J.]
07.11.2022
Index : Yes / No
Internet : Yes / No
pkn
To
1.The Commissioner of Customs,
Custom House,
New Harbour Estate,
Tuticorin – 628 004.
2. The Joint / Additional Commissioner
of Customs (Imports),
Custom House,
New Harbour Estate,
Tuticorin – 628 004.
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W.A(MD) Nos.935 to 941 of 2022
R.MAHADEVAN, J.
and
J.SATHYA NARAYANA PRASAD, J.
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W.A(MD) Nos.935 to 941 of
07.11.2022
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