2014 (2) TMI 491 - HC - Customs

Transhipment of goods - Goods Imported (Conditions of Transhipment) Regulations, 1995 - it was argued that the violation of Sections 33, 34 and 36 of the Customs Act, if any, is not by the petitioners but by the carrier i.e. Indian Airlines - Held that - . Section 30 as it stood at the relevant time requires the person in charge to deliver to the proper officer such import manifest within 24 hours after arrival of an aircraft at customs station i.e. customs airport. Here, the aircraft arrived at the Nagpur customs airport at 9.30 P.M. on 01.09.1997 and the respondents were informed about arrival of said machine on 02.09.1997 itself. The impugned order, rightly, nowhere alleges violation of Section 30 of the Customs Act, 1962. Merely because on 04.08.1997 Petitioner No. 2 had written to Respondent No. 2 to take necessary steps to enable commencement of full fledged cargo importexport operations from Nagpur customs airport, an inference as drawn in the impugned order cannot be sustained. Even otherwise, on merits also no confiscation could have been ordered under Section 111(d) and (f) of the Customs Act, 1962. Question of scope & field occupied by Section 8(a) of the Customs Act, 1962, left open for appropriate consideration in future - order set aside - revenue to appropriate amount of duty paid by the petitioners towards duty on imported machine. If on that count, they are entitled to charge any interest in accordance with law, they are permitted to claim the same from the petitioners and recover it. The order of confiscation and penalty is also set aside - Decided in favor of assessee.

Summary

Issues Involved:
1. Confiscation of imported goods under Section 111(d) and (f) of the Customs Act, 1962.
2. Jurisdiction of the Deputy Commissioner of Customs and Central Excise.
3. Compliance with Sections 7(a), 8(a), 33, 34, 36, 45, 54, and 55 of the Customs Act.
4. Validity of the transhipment permit.
5. Imposition of penalties under Section 112(a) of the Customs Act.
6. Preliminary objection regarding the availability of alternate remedy.

Detailed Analysis:

1. Confiscation of Imported Goods under Section 111(d) and (f) of the Customs Act, 1962:
The court found that the confiscation of the machine under Section 111(d) and (f) was unsustainable. Section 111(d) pertains to goods imported contrary to any prohibition imposed by or under the Act or any other law, which was not applicable as there was no such prohibition in this case. Section 111(f) relates to goods not mentioned in the import manifest or import report, which was also not applicable as the machine was properly described in the import manifest. Therefore, the confiscation ordered under these sections was quashed.

2. Jurisdiction of the Deputy Commissioner of Customs and Central Excise:
The petitioners argued that the jurisdiction to take action was with the Commissioner of Customs at Mumbai and not with Respondent No. 3, the Deputy Commissioner of Customs and Central Excise at Nagpur. However, this issue was not raised in the writ petition or before Respondent No. 3, and the court did not permit arguments on this issue due to insufficient material on record.

3. Compliance with Sections 7(a), 8(a), 33, 34, 36, 45, 54, and 55 of the Customs Act:
The court noted that the declaration of Nagpur Airport as a Customs Airport under Section 7(a) was sufficient to allow unloading of imported goods. The absence of an approved place under Section 8(a) did not bar unloading at the Customs Airport. Sections 33, 34, and 36, which deal with unloading at approved places, under supervision, and during working hours, respectively, were not violated by the petitioners as these obligations were on the carrier, Indian Airlines, and not on the petitioners. The court also found that the transhipment permit issued by the customs authorities at Mumbai allowed the machine to be transhipped to Nagpur, and this permit was not considered in the impugned order.

4. Validity of the Transhipment Permit:
The transhipment permit issued by the customs authorities at Mumbai authorized the transhipment of the machine to Nagpur, and the court found that this permit was a later and more clinching document. The impugned order did not evaluate or appreciate the implications of this permit, which allowed the unloading of the machine at Nagpur Customs Airport.

5. Imposition of Penalties under Section 112(a) of the Customs Act:
Since the confiscation under Section 111 was found to be unsustainable, the penalty imposed under Section 112(a) was also quashed. Section 112(a) deals with penalties for improper importation of goods liable to confiscation under Section 111, and without a valid confiscation, the penalty could not stand.

6. Preliminary Objection Regarding the Availability of Alternate Remedy:
The respondents raised a preliminary objection regarding the availability of an alternate remedy almost 16 years after the writ petition was filed. The court rejected this objection, citing precedents where such belated objections were not entertained. The court found that the writ petition was rightly entertained, and the preliminary objection was not sufficient to refuse to act upon the cognizance taken under Article 226 of the Constitution of India.

Conclusion:
The court quashed the impugned order dated 25.11.1997, set aside the confiscation and penalty, and allowed the writ petition. The respondents were directed to appropriate the amount of duty paid by the petitioners and were permitted to claim any interest in accordance with the law. The security, surety, or bank guarantee furnished by the petitioners was discharged, and the rule was made absolute with no order as to costs.