2024 (2) TMI 380 - HC - Customs

Release of goods - Confiscation - redemption fine - penalty - insecticides, pesticides and other agrochemicals including technical such as Cyantraniliprole Technical - Import through Port which is not a specified port Import - prohibited goods or not - re-export of back to origin without any basis or justification - whether Petitioner has no privity with the manufacturer in the China ie, the Country of Origin? - HELD THAT - It is clear that the petitioner has accepted the mistake on importing the goods contrary to the provision of Section 45 of the Insecticide Act, 1968 which is already reproduced in the averments quoted herein above from the affidavit-in-reply of the respondents and therefore the same are not repeated herein. The petitioner has also paid Rs. 5,00,000/- toward redemption fine as imposed vide the impugned order. In such circumstances, the respondent authority has committed an error by directing the petitioner to redeem the goods only for back to the origin purpose inspite of the fact that the petitioner has paid the required duty under the Act. It is also not the case of the respondent authority that the goods are imported in violation of any provisions of the Customs Act, but in view of the Rule 45 of the Rules the petitioner could not have imported the goods at part which is not specified in the said Rule, the goods therefore have been confiscated as per Section 111 and 112 of the Customs Act, 1962 - the respondent authority ought to have permitted the clearance of the goods to the petitioner on payment of the redemption fine for home consumption. It is opined that as the petitioner has imported such goods at the place other than the places specified in Rule 45 of the Insecticides Rules, 1971, the petitioner is penalized and redemption fine is imposed for committing such mistake for which the petitioner has already paid Rs. 5,00,000/- towards redemption fine imposed by the respondent authority. In such circumstances the respondent authority ought to have permitted the petitioner for clearance of the goods on payment of redemption fine for home consumption. As the breach of Rule 45 of the Insecticides Rules, 1971 is remedied by imposition of the redemption fine towards confiscation of the goods, the goods would be required to be cleared for home consumption and could not have been ordered to be deported. The impugned order is modified to the extent that the petitioner be permitted to clearance of goods for home consumption, as payment of the redemption fine of Rs. 5,00,000/- is already been paid - petition allowed.

Summary

Issues Involved:
1. Legality of the import of goods at an unauthorized port.
2. Validity of the order directing re-export of goods.
3. Applicability of redemption fine and penalties.
4. Availability of alternative remedies under the Customs Act, 1962.

Summary:

Legality of the Import of Goods at an Unauthorized Port:
The petitioner, engaged in the manufacture and import of insecticides, imported "Cyantraniliprole Technical" through Hazira Adani Port, which is not a specified port under Rule 45 of the Insecticides Rules, 1971. The goods were declared under CTH 38089199 and the total customs duty of Rs. 9,90,65,737/- was paid. A query was raised regarding port restriction during the Out of Charge (OOC) process. The petitioner clarified that the goods met all valid requirements and requested clearance or transshipment to a permissible port.

Validity of the Order Directing Re-export of Goods:
The respondent authority passed an order on 12.09.2023, holding that the goods were "prohibited" and mandatorily liable for "re-export." The petitioner argued that there was no intentional misdeclaration and that the goods should be cleared for home consumption. The respondent authorities admitted that there was no violation regarding valuation, classification, duty revenue compliance, or CIB license, except for the breach of Rule 45 of the Insecticides Rules, 1971.

Applicability of Redemption Fine and Penalties:
The petitioner paid Rs. 5,00,000/- towards redemption fine under Section 125 of the Customs Act, 1962, under protest. The respondent authority imposed a redemption fine of Rs. 5,00,000/- and a penalty of Rs. 5,00,000/- on the importer, and Rs. 50,000/- on the CHA, M/s. Tulsi Logistics. The petitioner contended that the respondent authority erred in directing the re-export of goods despite the payment of the required duty and redemption fine.

Availability of Alternative Remedies under the Customs Act, 1962:
The respondent argued that the petitioner had an alternative efficacious remedy under Section 128 of the Customs Act, 1962, to challenge the impugned order. The court noted that the petitioner had accepted the mistake and paid the redemption fine. It was observed that the respondent authority had permitted the clearance of goods for home consumption in similar cases upon payment of redemption fine.

Conclusion:
The court held that the respondent authority committed an error by directing the re-export of goods despite the payment of the required duty and redemption fine. The breach of Rule 45 of the Insecticides Rules, 1971, was remedied by the imposition of the redemption fine, and the goods should be cleared for home consumption. The petition succeeded, and the impugned order was modified to permit the clearance of goods for home consumption. Rule was made absolute to this extent, with no order as to costs.