2021 (5) TMI 123 - HC - Customs

First time violation of import condition - relaxation from the requirement to produce Phytosanitary Certificate - Auction of imported goods which were not cleared despite two notices served - HELD THAT - It is true that the importer cannot demand relaxation of the requirement of production Phytosanitary Certificate as a matter of right. It is equally true that in matters such as this, the Court should be extremely cautious as there are environmental and ecological implications. It is equally true that the petitioner was found to have committed violation of the requirements of Plant Quarantine Regulation of Import in India Order, 2003 on one occasion earlier. It is true that the goods is question have been imported to India without having been fumigated by Methyl bromide at the country of export. The petitioner had imported as many as four consignments at one go. The very same exercise can be undertaken in respect of the remaining consignments also. This Court can never mandate the authority to be unmindful of the consequences. On the other hand, this Court is only calling upon the authorities to do the very same exercise that was undertaken in respect of the consignment that is subject matter of this appeal. The remaining three consignments can also be similarly fumigated and a similar inspection also undertaken. If thereafter, the authorities are satisfied that the clearance of the said consignments will not be of any threat to Indian ecology and environment, the importer can be allowed to take the goods after paying the applicable duties. The petitioner knows that if tomorrow he imports another consignment without Phytosanitary Certificate, then his fate is doomed because such a consignment can never ever be cleared. That is all the more so, because of the order passed in these writ petitions - That apart, as rightly pointed out by the learned counsel for the petitioner, it is not as if a second or third violation cannot be condoned at all. Petition disposed off.

Issues Involved:
1. Validity of Phytosanitary Certificates.
2. Compliance with Section 48 of the Customs Act.
3. Legitimacy of the auction proceedings.
4. Entitlement to relaxation from the requirement of Phytosanitary Certificates.
5. Right to claim balance amount post-auction.
6. Environmental and ecological implications of importing non-fumigated goods.
7. Repeated violations of Plant Quarantine Regulation of Import into India Order, 2003.

Issue-wise Detailed Analysis:

1. Validity of Phytosanitary Certificates:
The petitioner imported four consignments of logs from Equatorial Guinea, which landed at Tuticorin Port in November-December 2018. As per the Plant Quarantine (Regulation of Import into India) Order, 2003, the consignments should have been fumigated with Methyl bromide prior to export, with the treatment endorsed on the Phytosanitary Certificate issued at the country of export. The petitioner produced such certificates, which turned out to be invalid. The petitioner claimed that the exporter cheated him, while the department asserted that the certificates were fake.

2. Compliance with Section 48 of the Customs Act:
Section 48 mandates that goods brought from outside India should be cleared within thirty days. If not, the proper officer must issue a notice to the importer. In this case, notices were issued on 28.03.2019 and 05.04.2019. The final notice stated that if no reply was received, it would be presumed that the importer was not interested in the cargo, which would then be disposed of as per the Act. The importer failed to obtain the necessary relaxation, leading to the auction of the goods.

3. Legitimacy of the Auction Proceedings:
The goods were auctioned on 15.10.2019, with M/s. Vijayalakshmi Traders becoming the successful bidder. The auction proceedings were challenged by the petitioner. The court upheld the auction proceedings, noting that the customs authorities could not wait indefinitely for the petitioner to obtain relaxation. The court found that the authorities had given reasonable time to the importer, who failed to secure the necessary relaxation.

4. Entitlement to Relaxation from the Requirement of Phytosanitary Certificates:
The bidder, Vijayalakshmi Traders, obtained relaxation from the requirement to produce the Phytosanitary Certificate. The court noted that the power of relaxation could be exercised only in public interest and that repeated violations could not be condoned. The petitioner had previously violated the requirements, and thus, the case was treated as a subsequent violation. The court emphasized that no importer could demand relaxation as a matter of right.

5. Right to Claim Balance Amount Post-Auction:
The petitioner argued that after deducting applicable duties, the customs authorities were bound to pass on the balance amount to the importer. The court permitted the petitioner to submit a formal application under Section 152 of the Customs Act for payment of the balance amount. The concerned authority was directed to dispose of the application on merits within six weeks.

6. Environmental and Ecological Implications of Importing Non-Fumigated Goods:
The court highlighted the environmental and ecological risks associated with importing non-fumigated goods. It noted that the power of relaxation should be exercised cautiously, considering the potential dangers to flora, fauna, and the environment. The court referenced a Delhi High Court decision emphasizing the importance of fumigation prior to export.

7. Repeated Violations of Plant Quarantine Regulation of Import into India Order, 2003:
The petitioner had previously violated the Plant Quarantine Regulation, and thus, the current case was treated as a subsequent violation. The court noted that while one-time exceptions could be granted, repeated violations could not be condoned. The court allowed the petitioner to clear the remaining consignments after fumigation and inspection, provided it did not pose a threat to Indian ecology and environment.

Conclusion:
The court upheld the auction proceedings and allowed the petitioner to apply for the balance amount post-auction. It emphasized the importance of compliance with the Plant Quarantine Regulation and the environmental implications of importing non-fumigated goods. The court permitted the petitioner to clear the remaining consignments after necessary precautions, underscoring that public interest must be served. The petitioner was warned against future violations and required to bear the costs of fumigation and other precautionary measures.

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