TMI Blog2020 (10) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the said period can be extended by another thirty days by the Central Board of Indirect Taxes and Customs. Sub-section (4) clarifies that if pursuant to an order passed under sub-section (2), the adjudicating authority or any officer of customs authorized in this behalf by the Principal Commissioner of Customs or Commissioner of Customs makes an application to the Commissioner (Appeals) within the time specified, such application shall be heard by the Commissioner (Appeals) as if it were an appeal made against the decision or order of the adjudicating authority and the provisions relating to appeals shall be applicable to such application. The suo-motu revisional power under sub-section (2) of section 129 D is within a very narrow compass; to ensure that the subordinate authorities are kept within the bounds of their authority to make them act according to law; according to the procedure established by law; and according to well defined principles of justice; thus conforming to the requirement of legality or propriety - Also, consequent upon exercise of power under sub-section (2) of section 129 D, the application filed before the Commissioner (Appeals) would be treated as if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicating authority did not give reasons as to why absolute confiscation or re-export was not considered as an option and as per the sixth ground , enquiry was not conducted for ascertaining the market price and margin of profit for imposition of redemption fine and penalty. When the goods were not cleared, those were allowed to be warehoused under section 49 of the Customs Act and the goods remained warehoused for about nine months. Considering the long pendency of the consignment besides its perishable nature and the fact that the consignments were rotting in the open yard of the Mumbai Port Trust facing the fury of the monsoons, the adjudication was taken up on priority. Adjudicating authority noted that the imports were made in contravention of the notification dated 29.03.2019 and trade notice dated 16.04.2019. Thus, the goods became prohibited, liable for confiscation - the adjudicating authority calculated the margin of profit @ Re.1 per kg as suggested by the assessing officer and on that basis worked out the redemption fine in terms of the second proviso to sub-section (1) of section 125 - the adjudicating authority had the power to give option to the owner or person c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Choudhari, Mr. Samsher Garud and Ms. Juhi Valia i/b. Jaykar Partners for the petitioner in both the Petitions. Mr. Anil C. Singh, ASG with Mr. Pradeep S. Jetly, Senior Advocate and Mr. J. B. Mishra for Respondent Nos.4 to 6 in both the Petitions. Ms. Faranaaz Karbhari with Mr. Ishwar Ahuja and Ms. Khushboo Rupani for Respondent No.7 in both the Petitions. Judgment and Order : (Per Ujjal Bhuyan, J.) Facts and reliefs sought for being identical in the two writ petitions, those were heard together on 06.10.2020 and are being disposed off by this common judgment and order. 2. We have heard Dr. Sujay Kantawala, learned counsel for the petitioners; Mr. Anil Singh, learned Additional Solicitor General along with Mr. Pradeep Jetly, learned senior counsel for respondent Nos.4 to 6. We have also heard Ms. Faranaaz Karbhari, learned counsel for respondent No.7. 3. Writ Petition (L) No.3503 of 2020 was argued by learned counsel for the parties as the lead case. Therefore, all facts and pleadings mentioned would be in reference to the said writ petition. 4. By filing this petition under Article 226 of the Constitution of India, petitioner has sought for the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 5722456, all dated 18.11.2019, for total quantity of 38,500 MT. 9.1. However, customs authorities did not permit clearance of the above goods. As a result, petitioner was forced to shift the entire consignment of yellow peas to customs warehouse under section 49 of the Customs Act, 1962 (briefly the Customs Act hereinafter). It is stated that in order to ensure that the yellow peas were not damaged, fumigation had to be carried out regularly to prevent insect contamination. This resulted in incurring of further expenditure by the petitioner in addition to rent paid to the customs warehouse. 10. Government of India, Ministry of Commerce and Industry, Department of Commerce (Directorate General of Foreign Trade) issued notification No.37/2015-20 dated 18.12.2019 whereby it was notified that import of peas (pisum sativum) including yellow peas, green peas, dun peas and kaspa peas having Exim code 0713 1000 was restricted and subject to minimum import price of ₹ 200.00 CIF per kilogram and annual quota of 1.5 lakh MT; besides import was allowed only through Kolkata sea port. 11. It appears that Union of India filed number of transfer petitions in the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details of which have been furnished in paragraphs 17 and 18 of the writ petition. Total amount paid by the petitioner covering all the above three heads is ₹ 44,21,31,298.00. This amount covered all the bills of entry. 13.1. On payment of the aforesaid amount, petitioner received out of charge from the customs department for all the bills of entry. 14. Notwithstanding the above, goods of the petitioners were not released. On enquiry, petitioner came to know that on 02.09.2020, separate letters were written by respondent Nos.5 and 6. In his letter by respondent No.6 addressed to respondent No.5, he requested to put the consignments on hold making a reference to letter of Directorate General of Foreign Trade dated 01.09.2020. Respondent No.5 in turn requested Mumbai Port Trust i.e., respondent No.7 not to issue delivery order of the consignments of the petitioner. The above letter was received by respondent No.7 in the midst of unloading of the goods of the petitioner. Thereafter petitioner received a letter dated 09.09.2020 from respondent No.7 stating that the cargo stored in its premises would not be released in view of directions received from the customs authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for the petitioner who had submitted that petitioner was being compelled to pay substantial amount of money to the authorities for warehousing of the goods, who were not releasing the goods in question despite making payment in terms of the order-inoriginal that this Court directed respondents to file the affidavit within ten days fixing the case for consideration on 06.10.2020. When this Court was in seisin of the matter Commissioner of Customs (Import-I), Mumbai despite being a respondent in the proceeding, purported to have passed the order dated 01.10.2020 under section 129 D(2) of the Customs Act without informing or taking the leave of the Court. This amounts to over-reaching the proceedings of the Court and is an act of contempt. 17.1. Adverting to the order dated 01.10.2020, he submits that all the grounds given by the Commissioner directing the Additional Commissioner of Customs to apply to the Commissioner (Appeals) for setting aside of the order-in-original are totally frivolous and are no grounds at all in the eye of law. One by one he has taken us to the various grounds given in the order dated 01.10.2020 for review of the order-in-original. 17.2. He has also p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led the appeal before the Commissioner (Appeals) against the order-in-original. He, therefore, submits that there is no merit in the writ petition. Writ petition should be dismissed. 19. In reply, Dr. Kantawala submits that such submission on behalf of the respondents is not only unfair but is also wholly untenable. It is not the petitioner but the respondents who had sought to materially alter the subject matter of the writ petition and thereafter have contended that the writ petition should be dismissed since petitioner has not challenged the subsequent order dated 01.10.2020. This is most unfair, he submits. The order-in-original dated 03.09.2020 is holding the field. The said order has neither been set aside nor stayed by any appellate or higher authority. Petitioner has complied with all the conditions of the said order and made all the payments. Thereafter out of charge has been issued. Therefore, there cannot be any justifiable reason not to release the imported goods of the petitioner. Because of storage of the goods in customs warehouse, petitioner is having to incur more than ₹ 60 lakhs per day. Viewed in that context action of the respondents is extremely high-h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at has been admitted by the respondents that it has paid the customs duty, redemption fine and penalty in terms of the order-in-original, total payment being ₹ 44,21,31,298.00 covering all the bills of entry. Thereafter out of charge was given. 24. In spite of making the requisite payments in terms of the order-inoriginal, the goods were not released on the strength of the impugned letters dated 02.09.2020 which compelled the petitioner to approach this Court. 25. The two writ petitions were listed before this Court on 25.09.2020 on which date, this Court granted ten days time to the respondents to file their affidavit making it clear that the case would be taken up on 06.10.2020. When the two writ petitions were taken up on 06.10.2020, the affidavit in reply filed on behalf of respondent Nos.4 to 6 mentioned that Commissioner of Customs (Import-II) had passed review order on 01.10.2020 under section 129 D(2) of the Customs Act pointing out various deficiencies in the order-in-original whereafter Additional Commissioner of Customs was directed to apply to the Commissioner (Appeals) to set aside the order-in-original. Copy of the order dated 01.10.2020 has been annexed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... priety of any such decision or order and may, by order, direct such authority or any officer of customs subordinate to him to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Principal Commissioner of Customs or Commissioner of Customs in his order. 27.1. From a careful analysis of sub-section (2) of section 129 D, the following features can be culled out:- (i) the said sub-section has conferred power on the Principal Commissioner of Customs or Commissioner of Customs to call for and examine the record of any proceeding suo-motu; (ii) the proceeding must be before an adjudicating authority subordinate to the Principal Commissioner of Customs or Commissioner of Customs and that subordinate adjudicating authority has passed any decision or order in such proceeding under the Customs Act; (iii) either of the two higher authorities may call for and examine the record of such proceeding for the purpose of satisfying himself as to the legality or propriety of any such decision or order; (iv) if the higher authority is satisfied that such decision or order is not legal or proper, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Though the examination was in the context of Rent Control Acts of different states, nonetheless the Constitution Bench examined the scope and ambit of revisional jurisdiction from a jurisprudential point of view. In that context, Supreme Court examined the extent, scope, ambit and meaning of the terms legality or propriety amongst others which form the fulcrum of revisional jurisdiction. Referring to its decision in Sri Raja Lakshmi Dyeing Works Vs. Rangaswamy Chettiar, (1980) 4 SCC 259 , it was held that ordinarily revisional jurisdiction is analogous to a power of superintendence and may sometimes be exercised even without it being invoked by a party [like sub-section (2) of section 129D of the Customs Act]. The extent of revisional jurisdiction is defined by the statute conferring such jurisdiction. Conferment of revisional jurisdiction is generally for the purpose of keeping the tribunals subordinate to the revising tribunal within the bounds of their authority to make them act according to law, according to the procedure established by law and accordingly to well-defined principles of justice. Revisional jurisdiction as ordinarily understood is always included in appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er most hastily in the midst of the court proceeding keeping the Court completely in the dark. After narrating the facts of the case and the order-in-original passed by the adjudicating authority, Commissioner of Customs took the view that the said order is not legal and proper for the following reasons (mentioned as grounds):- 1. non-issuance of show cause notice by the adjudicating authority; 2. non-addressal of the issue of suspension of import export code of the importer; 3. adjudication order was issued proceeding on the basis that the goods were required to be released against redemption fine whereas there were number of issues which were required to be taken into consideration, such as, suspension of import export code etc.; 4. adjudicating authority did not give reasons as to why absolute confiscation or re-export was not considered as an option; 5. adjudicating authority did not discuss as to why he relied upon the certificate of accredited laboratory rather than referring the matter to the designated government agency; 6. enquiry not conducted for ascertaining market price and margin of profit for imposition of redemption fine and penalty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he adjudication on priority. 32.1. Section 124 of the Customs Act deals with issuance of show cause notice before confiscation of goods etc. It says that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person is given a notice in writing containing the grounds for the proposed action, and thereafter giving him an opportunity of making a representation in writing within reasonable time. However, the first proviso is relevant and it says that the show cause notice and the representation may at the request of the person concerned be oral. Therefore, under section 124 of the Customs Act at the request of the owner or person concerned, the show cause notice and the representation in writing may be waived and thus may be oral. 32.2. In the instant case, petitioner made a request not to issue show cause notice but to give him personal hearing. This was accepted by the adjudicating authority which power admittedly he has under the first proviso to section 124 and he has given reasons for the same i.e., long pendency and perishable nature of the consignments. 33. The next ground given is non-addressal of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 49 of the Customs Act and the goods remained warehoused for about nine months. Considering the long pendency of the consignment besides its perishable nature and the fact that the consignments were rotting in the open yard of the Mumbai Port Trust facing the fury of the monsoons, the adjudication was taken up on priority. Adjudicating authority noted that the imports were made in contravention of the notification dated 29.03.2019 and trade notice dated 16.04.2019. Thus, the goods became prohibited, liable for confiscation. 34.2. Section 125 of the Customs Act gives an option to pay fine in lieu of confiscation. Sub-section (1) provides that whenever confiscation of any goods is authorized by the Customs Act, the officer adjudicating it in the case of any goods the importation or exportation whereof is prohibited for the time being in force, may and in the case of other goods, shall give to the owner of the goods or the person concerned, an option to pay in lieu of confiscation, such fine as the said officer thinks fit. The second proviso clarifies that such fine shall not exceed the market price of the goods confiscated and in the case of imported goods, minus the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eas entered the port area. Report from analytical test laboratory revealed quality of the pulses had deteriorated on account of humidity, exposure and pest attacks. The documents submitted by the importer from time to time during the interregnum also goes on to lend credence to the deterioration in the quality of the goods. Thus, I am inclined to believe that goods have lost much of their market value though they are still fit for human consumption as per accredited laboratory certificate. Hence, I consider it appropriate to impose fine and penalty calculating the margin of profit @ ₹ 1 per Kg as suggested by the assessing officer despite the importer showing a profit of only ₹ 5 paise per kg. 34.5. Thus for the reasons given, the adjudicating authority calculated the margin of profit @ Re.1 per kg as suggested by the assessing officer and on that basis worked out the redemption fine in terms of the second proviso to sub-section (1) of section 125. 34.6. In such circumstances, taking exception to the order-in-original on the above grounds appears to be questionable. As already discussed, adjudicating authority had the power to give option to the owner or person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their affidavit have themselves admitted that the redemption fine and personal fine were levied proportionately to the quantity declared in the bills of entry. Petitioner has complied with the terms and conditions of the order-in-original and made the necessary payments. Out of charge has been issued. Because of warehousing of the goods under section 49 of the Customs Act, petitioner is required to pay a substantial amount to the customs authority. In the above context and after thorough consideration of all aspects of the matter, we are of the view that non-release or withholding of the imported goods of the petitioner any further would not be just and proper. At least the grounds given in the order dated 01.10.2020, which order itself was passed in a highly improper manner, do not justify that the goods should be withheld or denied release notwithstanding the order-in-original and compliance thereto. Conclusion 38. Consequently, we direct the respondents more particularly respondent Nos.4 to 7 to forthwith release the goods of the petitioner covered by bills of entry bearing Nos.5720040, 5720192, 572069, 5722458, 5722730, 5719772, 5722243 and 5722456, all dated 18.11.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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