2019 (11) TMI 1060 - HC - Customs

Continued possession/indefinite retention of Accumulated stock of Shark Fins - utilization for permitted domestic use or otherwise the stock is to be destroyed - HELD THAT - While use of Shark Fins for certain permitted activity (other than as the ingredient in Shark Fins soup), may be possible, the technology for such usage is still in the process of development. Thus, there is an element of uncertainty as to the time frame within which, the petitioner can legally utilize the accumulated stock of Shark Fins in India. If the technology for high value product is currently not available in India, the indefinite retention of the perishable stock, may not be justified. In this context, the petitioner had voiced concern about the costs involved in keeping the accumulated stock of Shark Fins in India, without being permitted to export the same - This Court cannot be unmindful of the fact that the Shark Fins were procured by the petitioner during the period when there was ban on export. Such ban imposed by the Indian Government has since been upheld by the Courts. The Learned Counsel for the petitioner however submits that the Shark Fins were procured with the hope that there will be a change of policy of the Government but it did not happen. Therefore, it is apparent that the product in question was accumulated at the risk and cost of the petitioner in the hope of change of Governmental policy. While the petitioner is seeking a direction for indefinite retention of the Shark Fins without exploring the option of permitted use based on the technology currently available, it has to be borne in mind that the product itself is perishable - particularly because the petitioner has failed to indicate any time limit for utilizing the stock of Shark Fins, for permitted domestic use, we feel that indefinite retention cannot be allowed. Review petition dismissed.

Summary

Issues: Review petition regarding accumulated stock of Shark Fins for permitted domestic use or destruction.

The review petition was filed concerning the direction given in a previous judgment regarding the accumulated stock of Shark Fins. The Supreme Court had disposed of a Special Leave Petition related to the same matter, allowing the petitioner to present arguments for continued possession of the stock before the High Court in a recall petition. The petitioner sought to utilize the unprocessed dried Shark Fins for high-value raw material in the collagen industry, but the technology for such usage was still under development, leading to uncertainty regarding the timeline for legal utilization of the stock in India.

The High Court had previously allowed the petitioner to either use the stock for domestic purposes or destroy it in an environmentally friendly manner within a specified timeframe. The petitioner expressed concerns about the costs associated with retaining the stock in India without the option to export it, as the export of Shark Fins was prohibited by government policy upheld by the courts. The indefinite retention of the perishable stock without a clear plan for utilization was deemed unjustified by the court.

Despite the petitioner's efforts to explore potential high-value uses for the Shark Fins, such as in the collagen industry, the lack of available technology for extraction and the petitioner's preference for more profitable options within India led to the dismissal of the review petition. The court noted that the procurement of the Shark Fins during an export ban, in the hope of a policy change, placed the burden of accumulation on the petitioner. Emphasizing the perishable nature of the product and the administrative costs involved in retention, the court ruled that indefinite retention could not be permitted.

As the petitioner failed to provide a specific timeframe for utilizing the stock for permitted domestic use, the court dismissed the review petition. The court ordered that if the petitioner did not seek clearance for permissible domestic use within three weeks, the goods would be destroyed under customs supervision in an environmentally friendly manner.