2020 (12) TMI 201 - HC - Customs

Release of confiscated goods - condition of re-export imposed on the importer while redeeming the goods - demand of demurrage from the Assessee/importer - Section 125 of Customs Act - HELD THAT - An apologetic Affidavit has been filed by the said authority and the learned Additional Solicitor General Mr. Sankaranarayanan has appeared in the matter. The learned ASG fairly submitted that there seems to be no merit in the contention of the Revenue that demurrage charges were so leviable in the present case and therefore, the Court may set aside the levy of demurrage charges and the goods in question may be released to the importer without any condition. However, a lenient view with regard to the conduct of the said officer may be taken by the Court, in view of Court order dated 24.09.2020 Upon a fair request made by the learned ASG, we dismiss the present appeal of the Revenue and taking a lenient view of the matter against the officer concerned, we do not take any further action against him in the matter. We hold that the imposition of condition of re-export under Section 125 of the Act was not justified and the imposition of such a condition is not envisaged in law and therefore, the order imposing such condition is liable to be set aside. The same is accordingly set aside. Appeal of Revenue dismissed.

Issues Involved:
1. Imposition of re-export condition under Section 125 of the Customs Act.
2. Legality of demurrage charges levied on the importer.
3. Conduct of customs authority in rejecting the waiver of demurrage charges.

Issue-Wise Detailed Analysis:

1. Imposition of Re-export Condition under Section 125 of the Customs Act:

The Revenue appealed against the CESTAT's decision which allowed the assessee to redeem goods without the condition of re-export. The Tribunal had referenced Section 125 of the Customs Act and various decisions, including the Mumbai Bench and the case of HBL Power Systems Ltd. vs. CC Visakhapatnam, which established that the adjudicating authority cannot impose a condition of re-export. The Tribunal emphasized that the scope of Section 125 is limited and does not empower authorities to compel importers to re-export goods. The Tribunal's decision was supported by the Andhra Pradesh High Court, affirming that such conditions are unjustified. Consequently, the High Court upheld the Tribunal's decision, setting aside the re-export condition as it was not justified under Section 125.

2. Legality of Demurrage Charges Levied on the Importer:

The Revenue argued that the goods remained in the bonded customs warehouse due to the assessee's failure to re-export, leading to a demand for demurrage charges. However, the assessee contended that the goods should be released without demurrage charges as they were unjustly detained due to the illegal re-export condition. The Court noted that the goods were confiscated and the condition of re-export was imposed, which was later set aside. The Court found that the demurrage charges were unjustified as the goods were detained due to the illegal condition imposed by the customs authorities. Therefore, the Court directed that any demurrage charges imposed on the assessee be quashed and the goods be released without any condition.

3. Conduct of Customs Authority in Rejecting the Waiver of Demurrage Charges:

The Court addressed the conduct of the Deputy Commissioner of Customs, who rejected the waiver of demurrage charges based on incorrect facts. The Court had previously directed the authority to file an affidavit and show cause why proceedings for perjury should not be initiated. The authority's communication incorrectly stated that the goods were not confiscated, which was contrary to the facts on record. The learned ASG acknowledged the merit in the assessee's contention and requested a lenient view regarding the officer's conduct. The Court, considering the apologetic affidavit and the fair request by the ASG, decided not to take further action against the officer but emphasized that the imposition of such conditions was not envisaged in law.

Conclusion:

The High Court dismissed the Revenue's appeal, set aside the condition of re-export under Section 125, quashed the demurrage charges, and directed the release of the goods to the assessee without any condition. The Court took a lenient view regarding the customs officer's conduct, refraining from further action but highlighting the importance of adhering to legal provisions. The Civil Miscellaneous Appeal filed by the Revenue was dismissed, and connected miscellaneous petitions were closed.

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