2011 (12) TMI 36 - HC - Customs

Petitioner had import licence to import 3 horses from Australia- He imported horses from Austria/ Germany- Custom invalidated such import on the ground that place of origin is different-petitioner seeking amendment/ renewal of import licence-Custom declined to amend renew since request was received after expiry of import licence- Held that - Procedures are evolved only in aid of, and to implement the substantive rights and obligations of parties. The procedural requirements cannot become an excuse to deny the substantive rights of a party, particularly when the prescribed procedure itself provides for the same. The petitioner under the substantive law of import is entitled to import horses even from Germany/Austria. The mere lack of a prior import license, to import horses from Austria/Germany cannot come in the way of the petitioner in now procuring an amended or a fresh import license under the relevant rules. The petitioner is entitled to clear the horses in question for home consumption, subject to payment of fine, penalty and other charges. The import license itself bears the date of its issue, and states the period of shipment. Hence its validity should be from the date of its issue, and not from the date of the relevant airway bill. The purport of clause 2.12.2 readwith clause 9.11A of Handbook of Procedure of Foreign Trade Policy 2009-14, is only to say that the import made under an import license shall be construed as valid with reference to the date of shipment/despatch of goods from the supplying country, and not by reference to the date of arrival of the goods at the Indian port. Clause 2.13 of handbook of procedure clearly permits the revalidation of the import license for upto six months from the date of expiry of its validity. Writ petition is allowed.

Summary

Issues Involved:
1. Validity and amendment of the import license.
2. Quarantine and health status of the imported horses.
3. Compliance with procedural requirements and substantive rights.
4. Imposition of fines and penalties.
5. Re-exportation and home consumption of the horses.

Detailed Analysis:

1. Validity and Amendment of the Import License:
The petitioner sought the quashing of a communication dated 20.01.2011 by the DGFT, which rejected the amendment request to include Austria/Germany as the country of origin in the import license. The DGFT's refusal was based on the fact that the license had expired on 25.11.2010, and the amendment request was filed on 09.12.2010. The court noted that clause 2.13 of the Handbook of Procedures allows revalidation of an import license for six months from the date of expiry. The court found no cogent reasons for not extending the validity and amending the license, especially since the import of horses from Austria/Germany is not banned.

2. Quarantine and Health Status of the Imported Horses:
The horses were imported on 08.09.2010 and kept in quarantine. The Quarantine Officer initially doubted the health documents and recommended deportation. However, subsequent tests, including those mandated by an order dated 21.03.2011, showed that the horses were free from diseases like EIA, Glanders, Japanese Encephalitis, and others. The court emphasized that the quarantine requirements are strict and non-negotiable, but noted that the horses had been found healthy.

3. Compliance with Procedural Requirements and Substantive Rights:
The court highlighted that procedural requirements should aid in implementing substantive rights and obligations. The petitioner was entitled to import horses from Austria/Germany under substantive law, and the procedural lapse of not having a prior import license should not obstruct this right. The court criticized the respondents for not reasonably considering the extension and amendment of the import license, especially given the urgency due to the livestock's nature.

4. Imposition of Fines and Penalties:
The Additional Commissioner of Customs had imposed fines and penalties on the petitioner for irregularities in the import process. The court noted that the petitioner had accepted these penalties and had been incurring significant costs for maintaining the horses in quarantine. The court found the imposition of fines and penalties justified but emphasized that the petitioner should now be allowed to take delivery of the horses.

5. Re-exportation and Home Consumption of the Horses:
The Commissioner of Customs (Appeals) had suggested exploring the possibility of releasing the horses for home consumption if re-export was not feasible. The court found this view pragmatic, considering the ban on re-export to Europe. The court directed the release of the horses to the petitioner, subject to conditions like satisfying health tests, paying customs duty, fines, and quarantine charges, and revalidating the import license.

Conclusion:
The court allowed the writ petition, quashing the impugned communication dated 20.01.2011, and directed the respondents to release the horses to the petitioner, subject to specific conditions. The court emphasized that procedural requirements should not obstruct substantive rights, especially when the import of horses from Austria/Germany is not banned and the horses have been found healthy. The decision balanced the need to adhere to procedural norms with the practical realities of dealing with imported livestock.