2021 (9) TMI 297 - HC - Customs

Request for release and re-export of goods - sugar - It is the petitioner's case that, being the owner of the goods, it is entitled to re-export, though on payment of necessary re-export charges - Revenue contended that, the Advance Authorisation Licence pertaining to the sugar in question has been issued in the name of R3 and thus the conditions that attach to that licence will have to be satisfied by the petitioner in order to entitle it to re-export. - HELD THAT - Statutory provisions and regulations cannot, the Bench holds, be interpreted in a manner so as to deprive the exporter of his title to the goods imported. On the question of confiscation of the goods, such a question did not arise in that case, in the light of a factual finding rendered to the effect that the licences issued were current and valid. The counter filed by the Customs Department in this case does not deal specifically with the validity of the licence. It only states that the licence stands in the name of the importer and thus the conditions that attach to the licence would have to be satisfied by any party wishing to deal with the goods. This is a matter to be examined by the authorities, bearing in mind the position that, all that is sought to be done by the foreign exporter/petitioner, is re-export of the goods. Conditions as may be specific to the importer, such as domestic manufacture, would, evidently, not be applicable to the petitioner. Re-export, once permitted, will be upon payment of applicable charges and duties, and in accordance with law - Petition disposed off.

Summary

Issues Involved:
1. Title to the goods.
2. Release and re-export of the goods.
3. Validity and conditions of the Advance Authorisation Licence.
4. Right to re-export and associated liabilities.

Issue-wise Detailed Analysis:

1. Title to the Goods:
The petitioner, a UK-based company, entered into a contract with R3 for the supply of sugar. Due to R3's inability to remit payment upfront, a tripartite agreement was formed involving the petitioner, Dr. Amin Controllers Pvt. Ltd., and Cooperative Rabobank U.A. The petitioner claimed title to the goods based on these agreements. Both R3 and R4, who were undergoing Corporate Insolvency Resolution Process, filed memos indicating no objection to the release of the goods, thereby simplifying the title dispute.

2. Release and Re-export of the Goods:
The petitioner sought the release and re-export of approximately 11,899.21 MT of sugar stored in the warehouses of R3 and R4. Both R3 and R4 had no objections to the release, subject to certain conditions. The court noted that since there was no objection from R3 and R4, the sugar in question should be released forthwith. The petitioner had also applied to the Customs authorities for permission to re-export the goods, which was still pending.

3. Validity and Conditions of the Advance Authorisation Licence:
The Customs Department argued that the right to re-export was not automatic and that liabilities attached to the Advance Authorisation Licence, issued in the name of R3, had to be satisfied. The court referred to the case of Union of India V. Sampat Raj Dugar, where it was held that the title to goods remained with the foreign exporter if the importer abandoned the goods. The Supreme Court had ruled that statutory provisions should not deprive the exporter of title, especially when the importer had no claim to the goods.

4. Right to Re-export and Associated Liabilities:
The Customs Department contended that the petitioner must fulfill the conditions attached to the Advance Authorisation Licence to re-export the goods. The court emphasized that the petitioner, as the owner, was entitled to re-export, subject to payment of necessary charges and duties. The court directed the authorities to make a decision within four weeks, considering the perishable nature of the goods and their prolonged storage since 2017.

Conclusion:
The court concluded that the petitioner held the title to the goods and was entitled to their release and re-export. The Customs Department was instructed to assess and discharge any liabilities before permitting re-export. The court's decision was guided by the principles established in the Sampat Raj Dugar case, ensuring that statutory provisions did not unjustly deprive the exporter of their title to the goods. The writ petition was disposed of with no costs, and the connected miscellaneous petitions were closed.