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Customs Act, 1962 – ss.2(33), 11(1) and 111(d) – Import – ‘prohibited goods’ – Appellants aggrieved of directions issued by High Court in its writ jurisdiction for compliance of orders-in- original dated 28.08.2020 passed by the Additional Commissioner of Customs and consequently, for release of goods imported by private respondents though the goods in question, according to appellants, were liable to absolute confiscation – Nature of the goods in question – Held: On facts, import of the referred goods was restricted to a particular quantity and could be made only against a licence – The letter and spirit of the restriction was that, any import beyond the specified quantity was clearly impermissible and prohibited –The goods in question, having been imported in contravention of the notifications dated 29.03.2019 issued by the Central Government as also the trade notice dated 16.04.2019, issued by the DGFT; and being of import beyond the permissible quantity and without licence, were ‘prohibited goods’ for the purpose of the Customs Act – Foreign Trade (Development and Regulation) Act, 1992 – s.3. Customs Act, 1962 – s.125 – Import – ‘prohibited goods’ and ‘other goods’ – Distinction between – Latter part of s.125 obligates the release of confiscated goods (i.e., other than prohibited goods) against redemption fine but, the earlier part of this provision makes no such compulsion as regards the prohibited goods; and it is left to the discretion of the Adjudicating Authority that it may give an option for payment of fine in lieu of confiscation – If the Adjudicating Authority does not choose to give such an option, the result would be of absolute confiscation – Principles to be applied for exercise of discretion so available in the first part of s.125(1) – Held: Exercise of discretion is a critical and solemn exercise, to be undertaken rationally and cautiously and guided by law; according to rules of reason and justice; and based on relevant considerations – The purpose behind leaving such discretion with the Adjudicating Authority in relation to prohibited goods is to ensure that all the pros and cons shall be weighed before taking a final decision for release or absolute confiscation of goods – On facts, orders-in- original dated 28.08.2020 of the Adjudicating Authority cannot be said to have been passed in a proper exercise of discretion – The Adjudicating Authority did not even pause to consider if the other alternative of absolute confiscation was available to it in its discretion as per the first part of s.125(1) of the Customs Act and proceeded as if it has to give the option of payment of fine in lieu of confiscation – Such exercise of discretion by the Adjudicating Authority was more of assumptive and ritualistic nature rather than of a conscious and cautious adherence to the applicable principles – When personal business interests of importers clash with public interest, the former has to, obviously, give way to the latter – Further, if excessive improperly imported goods are allowed to enter the country’s market, the entire purpose of the notifications would be defeated – Discretion in cases of present nature, involving far-reaching impact on national economy, cannot be exercised only with reference to the hardship suggested by the importers, who made such improper imports only for personal gains – The imports in question suffer from the vices of breach of law as also lack of bona fide and accordingly held liable to absolute confiscation but with a relaxation of allowing re- export, on payment of necessary redemption fine and subject to the importer discharging other statutory obligations – No leniency in the name of equity can be claimed by the importers – Respondent- importers being responsible for improper imports as also for the present litigation, apart from other consequences, also deserve to be saddled with heavier costs – Respondent-importers to pay costs of litigation to appellants, quantified at Rs. 2,00,000/- each. Import-Export – Adjudicating Authority, while ordering confiscation, gave option to the importers to redeem the goods in question on payment of fine in lieu of confiscation u/s.125(1) of the Customs Act – However, the DGFT took exception against release of the goods stating that the same were restricted items – Importers (private respondents) approached the High Court by way of separate writ petitions, seeking mandamus for clearance of the goods in question – While the writ petitions were pending, the Commissioner of Customs passed order dated 01.10.2020 in exercise of his powers u/s.129D(2) of the Customs Act, pointing out the alleged deficiencies in the adjudication orders; and directed filing of appeals before the Commissioner (Appeals) – Meanwhile, the High Court by order dated 15.10.2020 held that, prima facie, the grounds stated in the order dated 01.10.2020 did not make out any such case of illegality or impropriety as to call for exercise of suo motu revisional powers by the Commissioner under s.129D(2) of the Customs Act – Having said that, the High Court left the matter to be decided by the Commissioner (Appeals) – However, thereafter, the High Court issued directions to the respondents to forthwith release the goods of the importers – Legality and validity of the orders passed by the High Court – Held: Order dated 15.10.2020 passed by High Court suffers from inherent contradictions and inconsistencies; and cannot be approved – Significantly, if the purport of the order dated 15.10.2020 of the High Court had been that even if Commissioner (Appeals) would be deciding the matter in appeal, he could not order absolute confiscation of the goods because the High Court had ordered their release, it would immediately lead to the position that the order dated 15.10.2020 of the High Court carried inherent contradictions – If release of goods was the only option available with the authorities, the material part of consideration of the Appellate Authority had already been rendered redundant – When the matter was left for decision by the Commissioner (Appeals), there was neither any occasion nor any justification for the High Court to pass the order for release of the goods for the simple reason that any order for release of goods was to render the material part of the matter a fait accompli – This, simply, could not have been done –Apart from the fundamental flaws of contradictions, the order passed by the High Court on 15.10.2020 further suffers from the shortcomings that while issuing mandamus for release of goods, the High Court omitted to take into account the relevant facts as also the material factors concerning the imports in question – Impugned order dated 15.10.2020, having been passed while ignoring the relevant considerations, cannot be approved. Equity – Claim of – Held: Once the Court has reached to the conclusion that a particular action is wanting in bona fide, the perpetrator cannot claim any relief in equity in relation to the same action – Absence of bona fide in a claimant and his claim of equity remain incompatible and cannot stand together. Interim relief – Grant of – Matter of discretion – Considerations – Held: In matters of grant of interim relief, satisfaction of the Court only about existence of prima facie case in favour of the suitor is not enough – The other elements i.e., balance of convenience and likelihood of irreparable injury, carry their own relevance; and while exercising its discretion in the matter of interim relief and adopting a particular course, the Court needs to weigh the risk of injustice, if ultimately the decision of main matter runs counter to the course being adopted at the time of granting or refusing the interim relief. |
