2020 (1) TMI 599 - HC - Customs

Inaction of the Respondent authority of not releasing the imported goods - import of Areca Nuts from Sri Lanka within the period from 1 March 2003 to 18 March 2003 - clearance of goods for home consumption - section 47 of the Customs Act, 1962 - HELD THAT - There is no dispute that in the normal circumstances, the Petitioner's goods will be entitled to be cleared under section 47 of the Act. What is being put forth by the Respondent is pendency of appeal. We have not been shown any statutory provision that pendency of appeal by itself would amount to a stay or mere pendency of appeal without even moving any application for stay would mean that the authorities need not to take any steps under section 47 of the Act - In the present case, the Respondent has not even filed an application for stay in the pending appeal. The fact that the assertion of the Petitioner that the Respondent has not filed any application for stay was noted by us in the order passed on 26 November 2019 itself. Yet, no application for stay has been moved by the Respondent. The Petitioner is entitled to direction to the Respondent to take steps as per section 47 of the Act for clearance of the goods - the Respondent are directed to take necessary steps as envisaged under section 47 of the Act for clearance of the goods in question within a period of six weeks from today - petition allowed.

Summary

Issues:
Petitioner aggrieved by inaction of Respondent authority in releasing imported goods under Indo-Sri Lanka Free Trade Agreement. Respondent dropped proceedings but did not release goods. Petitioner seeks release of goods under section 47 of Customs Act, 1962. Respondent argues against release due to pending appeal.

Analysis:

The Petitioner imported Areca Nuts from Sri Lanka under the Indo-Sri Lanka Free Trade Agreement. An investigation was initiated by the Directorate of Revenue Intelligence on suspicion that the goods did not originate from Sri Lanka. After a show-cause notice and the Petitioner's response, the Respondent dropped proceedings on 28 March 2019. Despite this, the goods were not released, leading to the present petition.

The Petitioner's counsel argued for the release of goods under section 47 of the Customs Act, 1962, emphasizing that since proceedings were dropped, there should be no impediment to releasing the goods. Citing the Supreme Court decision in Union of India v. Kamlakshi Finance Corporation Ltd., it was contended that authorities should release the goods as a matter of discipline.

On the other hand, the Respondent's counsel stated that an appeal had been filed against the order dated 28 March 2019, raising various contentions, which, in their view, justified withholding the release of goods pending the appeal.

The High Court noted that there was no statutory provision indicating that the mere pendency of an appeal automatically stayed the release of goods under section 47 of the Customs Act. Despite the pendency of the appeal, the Respondent had not filed an application for stay. Therefore, the Court held that the Petitioner was entitled to a direction for the Respondent to proceed with the clearance of goods under section 47 of the Act.

Consequently, the Court directed the Respondent to take necessary steps for the clearance of the goods within six weeks, unless a judicial order granting a stay on the original order was obtained during this period. The writ petition was disposed of accordingly, with the directive for the release of goods under section 47 of the Customs Act, 1962.