2016 (4) TMI 184 - HC - Customs

Seeking direction to assess and permit provisional release of second hand Digital Multifunction print and copying machines - upon payment of applicable duties of customs on assessable value - Goods notified as restricted goods as per Notification No.35 (RE-2012)/2009-2014, importable only as against authorisation - Held that - the Commissioners of different regions, namely, Kolkata, Mumbai, Delhi and Chennai are exercising their discretions inconsistently. Mumbai and Kolkata Commissioners are releasing the goods on deposit of customs duty and also on payment of fine under Section 125 of the Customs Act, 1962 in the identical facts, wherein the old and used digital multifunction devices with standard accessories and attachments are imported without authorisation. On the other hand, the Commissioner, Chennai is taking a contrary stand. Thus the inconsistent views while exercising discretion have led to indiscretion at the hands of the Commissioners, resulting in divergent orders being passed. It is well settled that exercise of discretion dehors proper guidelines may create sometimes discrimination and arbitrariness. As a sequitur, the Central authorities may consider issuance of proper guidelines to all Commissioners, dealing with the goods, which are imported without authorisation in respect of release of goods, subject to adjudication as contemplated under the provisions of law. Respondents shall furnish a bond for making penalty, if any found imposable on adjudication along with the customs duty. Decided against the revenue

Summary

Issues:
1. Release of restricted goods without authorization.
2. Exercise of discretion by Customs authorities for release of goods.
3. Inconsistency in exercising discretion by Commissioners of different regions.

Issue 1: Release of Restricted Goods Without Authorization
The writ petitioner sought direction for the release of second-hand Digital Multifunction print and copying machines without the required authorization. The Single Judge allowed the release provisionally upon payment of applicable customs duties, noting that no proceedings for re-export had been initiated. The appellant, Commissioner of Customs, challenged the order based on the notification making such goods importable only with authorization.

Issue 2: Exercise of Discretion by Customs Authorities
The Bombay High Court and the Madras High Court previously addressed the release of prohibited goods pending adjudication. The Bombay High Court highlighted the officer's discretion in releasing prohibited goods, while the Madras High Court emphasized the relevance of the Foreign Trade Policy and the requirement for authorization for imports post-amendment. The respondent was permitted to take goods on furnishing a bond for the penalty.

Issue 3: Inconsistency in Exercising Discretion by Commissioners
The Commissioners of different regions, namely Kolkata, Mumbai, Delhi, and Chennai, were found to be exercising their discretion inconsistently in releasing goods imported without authorization. While Mumbai and Kolkata released goods on deposit of customs duty and payment of fines, Chennai took a contrary stand. The High Court emphasized the need for proper guidelines to prevent discrimination and arbitrariness in the exercise of discretion by Commissioners.

In conclusion, the High Court dismissed the appeal, upholding the Single Judge's order for the provisional release of the goods subject to final adjudication. The respondent was directed to furnish a bond for potential penalties, and the Central authorities were advised to issue guidelines for consistent handling of goods imported without authorization.