2023 (1) TMI 1063 - HC - Customs

Seeking a composite license for import and trading of restricted items and had paid the requisite fee for the same - actual user condition - permission to import and avail of the remaining guns which could not be imported, by way of an extension of the license by for a period of one year at least - HELD THAT - Considering the fact that the reliefs sought in both the writ petitions, when they were filed, have almost being satisfied and the outstanding issues relating to extension of license are pending before the DGFT, it is deemed appropriate to direct the DGFT to take a decision on the said application for extension of the licence within a period of two months from today. The DGFT may afford the Petitioner a hearing and pass a reasoned order in accordance with the Act and Rules. Demurrage which the Petitioner incurred during the period of late inspection and release of the consignment - HELD THAT - Considering the fact that if there is a delay in inspection, as per Rule 88(6), the additional charge or demurrage incurred by the Petitioner would be attributable to the licensing authority, the Petitioner is permitted to seek refund of the demurrage charges in accordance with law. The said application may be filed within a period of two weeks and, if preferred, shall be decided within a period of four weeks. Petition disposed off.

Issues Involved:
1. Validity and conditions of the import license.
2. Alleged violation of the 'actual user condition'.
3. Surrender of the import license.
4. Extension of the import license.
5. Refund of demurrage charges.

Detailed Analysis:

1. Validity and Conditions of the Import License:
The Petitioner, engaged in the import and trading of arms, was granted an import license on 25th September 2020, valid until 24th March 2022. The license was subject to an 'actual user condition', restricting the Petitioner from trading the imported arms.

2. Alleged Violation of the 'Actual User Condition':
A show cause notice was issued on 25th February 2021, alleging that the Petitioner violated the 'actual user condition' by selling imported arms. The Petitioner responded to this notice on 8th March 2021, contesting the allegations.

3. Surrender of the Import License:
On 11th March 2021, the DGFT requested the Petitioner to surrender the import license, prompting the Petitioner to file the present petition seeking various reliefs, including quashing the show cause notice and the DGFT's email.

4. Extension of the Import License:
The Petitioner argued that due to the show cause notice and order to surrender, they could only import 221 out of the 350 authorized guns. They sought an extension of the license to import the remaining guns. The Court directed the DGFT to decide on the Petitioner's application for extension within two months, providing a hearing and passing a reasoned order.

5. Refund of Demurrage Charges:
The Petitioner incurred over Rs.15,00,000 in demurrage charges due to delayed inspection by the Delhi Police. The Court noted that Rule 88(6) of the Arms Rules 2016 attributes additional charges due to inspection delays to the licensing and customs authorities, not the importer. The Petitioner was permitted to seek a refund of the demurrage charges within two weeks, with the application to be decided within four weeks.

Conclusion:
The Court directed the DGFT to decide on the extension of the import license and allowed the Petitioner to seek a refund of demurrage charges. With these directions, the petitions were disposed of, leaving all remedies open.

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