TMI Blog2002 (9) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... served scrupulously. On 25-6-2002, letter No. 446/9/2002 was issued by the Central Board of Indirect Taxes to the Customs Authorities informing them that the Director General of Foreign Trade had after reviewing the matter in consultation with the Ministry of Agriculture decided not to allow clearance of fresh garlic imported without a license for home consumption after imposition of fine or penalty and that such imported garlic should be re-exported forthwith. The petitioners imported garlic despite the public notice. 2.The Commissioner of Customs directed re-export of the cargo after imposing a penalty under Section 112 (a) of customs Act. The order reads thus : "I find no option but only to allow the importers to re-export the goods in terms of a public notice dated ..." 3.Section 125 of the Customs Act reads as follows : Option to pay fine in lieu of confiscation. - (1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w members' goods and therefore, the garlic imported from China cannot be re-exported since it would amount to discrimination. It was also submitted that all actions of the Government must be tested against the principle of reasonableness. When viewed in this light there is no justification for the Agriculture Ministry to have given such an advise and in fact there is nothing to indicate why the public notice has been issued, or what public interest has been affected. If the import amounts to anti-dumping then resort can be had to the relevant Rules which provide for imposition of duty if injury to local industry is established. (c) The impugned circulars and public notices are ultra vires Section 125 of the Customs Act. The circular dated 25-06-2002 and the public notice dated 20-06-2002 are without sanction of law. The Central Government and Ministry of Commerce issue licenses to State Owned Federations to import garlic but not to private individuals, and it amounts to infringement of the right of equality enshrined in Article 14 of the Constitution of India. The impugned circular is arbitrary and discriminatory. Section 151(a) of the Customs Act empowers the Central Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The provisions in Section 3(2) of the Foreign Trade (Development and Regulation) Act, 1992 show that the Government has the power to prohibit, restrict or otherwise regulate the import or export of goods. 6.Several decisions were relied on by both sides. (i) (1)Commissioner of Customs (Preventive) v. Uma Shankar Verma [2000 (120) E.L.T. 322 (Cal.)] and Shaik Jamal Basha v. Government of India [1997 (91) E.L.T. 277 (A.P.)] are both judgments of the Division Bench of the respective High Courts dealing with the power of adjudicating officer under Section 25. "If the goods are prohibited the option to confiscate them without giving any option to pay fine in lieu thereof is with the Customs authorities but when the goods are not prohibited, the Customs authorities have no other option but to allow grant of an option to the assessee to pay a fine in lieu of confiscation - Section 125 of Customs Act, 1962." (Calcutta High Court) "Section 125 leaves option to the officer to grant the benefit or not so far as goods whose import is prohibited but no such option is available in respect of goods which can be imported, but because of the method of importation adopted, be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty under Section 125(2) would be an integral part of proceedings relating to confiscation and consequential orders thereon, on the ground as in this case that the importer had violated the conditions of notification subject to which exemption of goods was granted, without attracting the provisions of Section 28(1) of the Customs Act. A reference may beneficially be made to a decision of this Court reported in Mohan Meakins Ltd. v. Commissioner of Central Excise, Kochi 2000 (115) E.L.T. 3 (S.C.) = 2000 1 SCC 462 wherein it has been observed in Para 6" ..... Therefore, there is a mandatory requirement on the adjudicating officer before permitting the redemption of goods, firstly, to assess the market value of the goods and then to levy any duty or charge payable on such goods apart from the redemption fine that he intends to levy under sub-section (1) of that section." In Suresh Kumar Agarwal v. Collector of Customs, Madras [1998 (103) E.L.T. 18 (A.P.)] it is held as follows : "Adjudication (Customs) - Redemption fine - Authority has a discretion to order release of prohibited goods on payment of fine in lieu of confiscation - Discretion given by the statute is for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the above case reference was made to the following observations in Andhra Industrial Works v. Chief Controller of Imports [1974 II SCC 348]. "No person can merely on the basis of such a Statement claim a right to the grant of an import licence, enforceable at law. Moreover, such a policy can be changed, rescinded or altered by mere administrative orders or executive instructions issued at any time." (5)Kasinka Trading and Another v. Union of India and Another [1994 (74) E.L.T. 782 (S.C.) = 1995 (1) SCC 274] was relied on where the Supreme Court upheld the power of the Government to withdraw the notification and it was held that what was issued in public interest and may be withdrawn in public interest. Reference was made therein to Subhash Photographics v. Union of India [1993 (66) E.L.T. 3 (S.C.) = 1993 Supp. III SCC 322] which dealt with flexibility in law-making. "In statutes like Customs Act and Customs Tariff Act one has also to keep in mind that such legislation can be properly administered only by constantly adjusting it to the needs of the situation. This calls for a good amount of discretion to be allowed to the delegate. As is often pointed out 'flexibility is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of the Constitution." 7.The following facts can be taken for granted since they are admitted by the petitioners. (a) Garlic must be imported only after obtaining license. Its import is restricted. (b) The petitioners knew that garlic was a restricted item and yet they imported it without obtaining licence. (c) The petitioners were aware of the public notice and yet they imported fresh garlic. 8.The petitioners' case is that garlic is a restricted item as against free and prohibited items. The Customs Act defines "prohibited goods" under Section 2(33) and it reads as follows : "prohibited goods" means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with." There is no definition of "restricted goods". 9.Section 111 categorizes goods which are liable to confiscation. Section 111(d) reads as follows : "any goods which are imported or attempted to be imported or are brought within the Indian customs waters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the upper limit of the fine imposed under this Section and sub-section (2) deals with the additional liability to pay duty and charges. As per Section 126, the property which is confiscated vests in the Central Government upon such confiscation. 14.In fact, the extracts from judgments of the Calcutta and Andhra Pradesh High Court relied on by the petitioners also clearly say that there is a discretion with the adjudicating authority to decide whether to give the person, who has imported or exported goods which are prohibited by law, the option to pay fine. Hence it cannot be contended that the authority has an obligation to give the petitioner the option to pay fine and a writ of mandamus must be issued. 15.In Garg Woollen Mills (P) Ltd. v. Addl. Collector of Customs, New Delhi [1998 (104) E.L.T. 306 (S.C.) = 1999 (9) SCC 175] the importer imported serviceable garments which had been concealed in woollen rags. Hence the whole consignment was confiscated. The consignment was absolutely confiscated and the authority under Section 125 of the Customs Act exercised his discretion not to give the option. The Supreme Court held as follows : "Under Section 125 a discretion has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confiscated and two, relating to the Government giving the licences only to State Trading Corporation and thereby depriving the petitioners from obtaining licence. These considerations deserve to be rejected even at the threshold. It is well-settled that equity does not play a part in these matters. It is not their case that they bona fide believed that they could import garlic freely. 18.In fact, this question of bona fide belief that the goods were importable weighed in the minds of the learned Judges in Akbar Badrudin Giwani v. Collector of Customs, Bombay [1990 (47) E.L.T. 161 (S.C.) = 1990 II SCC 203]. But that does not apply to this case. The other issue relating to discrimination between the petitioners and State Trading Corporation was not seriously urged. Further as held by the Supreme Court there is no fundamental right to import. The petitioners definitely have no right to import without licence. Their right is derived from the relevant legislation and is subject to them. 19.Next we come to the validity of the public notice. Section 3(2) of the Foreign Trade (Development and Regulation) Act gives the Central Government the power to prohibit, restrict or otherwise reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay High Court dealt with the validity of a public notice. Section 13 of the Customs Act deals with the Duty on pilferage goods and Section 23 deals with the remission of duty on goods by the Assistant Collector of Customs, where it is shown to his satisfaction that any imported goods had been lost or destroyed at any time before clearance for home consumption. By a public notice issued by the Collector of Customs the importer was asked to obtain a certificate from the Bombay Port Trust authorities to prove pilferage. The learned Judge relied on two decisions of the Supreme Court where it was laid down that the authorities who are vested with quasi judicial powers cannot be controlled by directions issued by the Board and that, "No authority however high placed can control the direction of a judicial or a quasi-judicial system. There is no provision in the Act empowering the Board to issue directions to the assessing authorities or the appellate authorities in the matter of deciding disputes between the persons who are called upon to pay duty and the department." 23.In B. Rajagopala Naidu v. State Transport Appellate Tribunal [AIR 1964 SC 1573] and M/s. Ravi Roadways v. Asia B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licy, which can be "changed, altered or rescinded" [1972 II SCC 348 (cited supra) and have accepted the need for continuous monitoring of the country's economy. The impugned public notice does not alter the public policy, it strikes at the power of adjudication of the authority, rendering him tooth-less. It is bad not because it infringes the petitioners' right to import as claimed by him, but because it infringes upon the adjudicating authority's power to decide. 28.As regards appellate remedy, in Ram Shyam Company v. State of Haryana (1985 III SCC 267), "Power was exercised formally by the authority set up under the Rules to grant contract but effectively and for all practical purposes by the Chief Minister..... The clitch of appeal from Caesar to Caesar's wife can only be bettered by appeal from one's own order to oneself." 29.To whom will the petitioners go, by way of appeal, with the executive fiat stuck on their heads? So the writ petition is maintainable. The public notice dated 20-06-2002 and the circular dated 25-06-2002 are quashed. 30.To sum up, (a) Fresh garlic can be imported only under a licence, hence it is restricted or prohibited; (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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