1983 (11) TMI 297 - HC - Customs

Summary

Issues:
1. Applicability of Section 13 of the Customs Act in case of pilferage.
2. Maintainability of the petition without exhausting statutory appeal remedy.

Analysis:

Issue 1: Applicability of Section 13 of the Customs Act in case of pilferage

The petitioners, a partnership firm engaged in shipchandling, imported a consignment of orange juice and tomato juice. Upon inspection, shortages were noted by Customs officials, leading to a demand for customs duty payment of &8377; 1,058. The petitioners argued that Section 13 of the Customs Act exempts duty payment in cases of pilferage after unloading but before clearance. Respondent No. 4 contended that evidence of goods landing in sound condition or short landing was necessary for exemption. The court held that the pilferage post-unloading exempts duty payment under Section 13. The petitioners were not required to prove pilferage occurrence, as they lacked access to the goods. The court deemed the Customs order incorrect due to the pilferage nature of the incident.

Issue 2: Maintainability of the petition without exhausting statutory appeal remedy

Respondent's counsel raised a objection on the petition's maintainability, citing the availability of an appeal against the Customs order. The court acknowledged the merit in the objection but declined to dismiss the petition on this ground. The prolonged pendency of the petition and uncertainty regarding timely appeal resolution led the court to reject the objection to prevent additional litigation. The court directed the Customs order's setting aside and the refund of the deposited amount without imposing costs.

In conclusion, the court ruled in favor of the petitioners, upholding the applicability of Section 13 of the Customs Act in cases of pilferage post-unloading. The court rejected the objection on the petition's maintainability due to prolonged proceedings and uncertainty over appeal resolution timelines. The Customs order demanding duty payment for pilfered goods was set aside, and the deposited amount was ordered to be refunded.