1990 (8) TMI 167 - HC - Customs

Summary

Issues Involved:
1. Legality of the refusal by Customs Authorities to release imported goods.
2. Validity of show cause notices issued by Customs Authorities.
3. Assessment and payment of customs duty and redemption fine.
4. Allegations of harassment and victimization by Customs Authorities.
5. Compliance with the Imports (Control) Order, 1955.

Issue-wise Detailed Analysis:

1. Legality of the refusal by Customs Authorities to release imported goods:
The appellants contended that the Customs Authorities wrongfully refused to release the concerned goods on 13th December 1990, despite having previously allowed similar clearances. The goods were imported under valid R.E.P. licenses and were stored in a non-duty paid warehouse under Section 59 of the Customs Act, 1962. The appellants had paid part of the assessed duty and obtained release of several consignments earlier. The refusal to release the goods was deemed unjustified and without any warrant.

2. Validity of show cause notices issued by Customs Authorities:
The appellants received four show cause notices between 23rd April 1990 and 23rd November 1990, alleging that the imported goods were disposable in nature and calling for their confiscation under Section 111(d) of the Customs Act, 1962. The appellants responded, contending that the goods were new and not disposable, and that the mere fact they were purchased out of stock lot did not justify the allegations. The Court noted that the appellants had replied to the notices and appeared before the adjudicating authorities, but the delay in adjudication was prejudicial to the appellants.

3. Assessment and payment of customs duty and redemption fine:
The appellants indicated that the total duty assessed on the consignments was Rs. 1,27,31,444/-, out of which Rs. 29,99,913/- had been paid, leaving a balance of Rs. 97,31,531/-. They expressed willingness to pay the balance duty and have the goods released. Additionally, a redemption fine of Rs. 4,85,000/- was assessed for three consignments, which the appellants agreed to secure through a bank guarantee. The Court directed the release of the goods upon payment of the duty and furnishing the bank guarantee.

4. Allegations of harassment and victimization by Customs Authorities:
The appellants claimed that the Customs Authorities were determined to harass and victimize them with ulterior motives. They argued that the authorities' actions, including the issuance of subsequent show cause notices and refusal to release goods, were intended to frustrate the proceedings pending in Court. The Court found justification in the appellants' submissions and depreciated the actions of the Customs Authorities, emphasizing the need for the authorities to act in accordance with law.

5. Compliance with the Imports (Control) Order, 1955:
The appellants maintained that the imported goods were covered under the Imports (Control) Order, 1955, as they were new goods purchased out of stock lot. They cited Clause 5(3)(iii) of the Order, which mandates that imported goods should be new unless otherwise stated in the license. The Court noted that the appellants had previously obtained clearances under the same provisions and found the subsequent imposition of restrictions by the Customs Authorities to be improper.

Conclusion:
The Court directed the release of the goods upon payment of the remaining duty and furnishing a bank guarantee for the redemption fine. The Customs Authorities were allowed to continue with the show cause notices but were restrained from passing any final orders until the appeal was heard. The Court emphasized the need for the authorities to act in accordance with the law and not otherwise. The application succeeded to the extent indicated, with no order as to costs. The hearing of the appeal was expedited, and the Customs Authorities were urged to dispose of the pending proceedings within eight weeks.