2020 (10) TMI 1142 - HC - Customs

Valuation - Detention of goods - Petitioner contended that, Authorities have raised frivolous queries - Manner in which adjudication order has been passed - Expiry of free time allowed by the shipping line and container freight station for clearance of imported cargo - vires of the Standing Order No.7493/99 dated 3rd December, 1999 and its subsequent amendment in Standing Order No.44/2016 dated 8th July, 2016, regarding PLATT Valuation of the Petitioner s goods as being contrary to the Customs Act, 1962. HELD THAT - Despite exercising complete restraint, we cannot help but say that the entire conduct of the officer suggests a complete non-application of mind which to say the least must be deprecated. We feel that this entire saga was wholly avoidable. When the Court had issued notice on 10th September, 2020 and had passed the order on 22nd September, 2020 stating that the interim application would be taken up for consideration on 24th September, 2020, the concerned officer ought to have informed the Court about the status of the adjudication process and ought to have sought the leave of the Court for issuance of the order-in-original. Even a bare perusal of the file which has been produced before the Court clearly shows that the order-in-original was signed on 24th September, 2020. It is only the date on which the order is signed, is the date on which the order is passed. Revenue authority cannot at their own whim and fancy, split an order viz. first pass the operative part of the order without any discussion or finding or reasons and then pass the speaking order with discussion and findings and conveniently choose dates such as in this case. If this Writ Petition had not been filed and if this Court had not passed the order dated 06th October 2020, requiring the Officer to clear the confusion of the dates, neither this Court nor the Petitioner would have ever known the manner in which the Revenue- Authority pass orders. We are left with no choice but to set aside the order in original dated 4th September, 2020 signed on 24th September, 2020 and issued on 24th September, 2020 in toto. Also in view of the above discussion, we direct the Respondent No.2 to depute another Officer in place and instead of the present Officer to hear the case of the Petitioner and after giving an opportunity of personal hearing pass a speaking order with reasons in accordance with law within a period of two weeks from the date of this order - Petition disposed off.

Summary

Issues Involved:
1. Validity and quashing of the impugned Standing Orders.
2. Release of imported goods based on the invoice price.
3. Compensation for costs and losses due to detention of goods.
4. Interim stay on the operation of the impugned Standing Orders.
5. Procedural irregularities in the adjudication process.

Detailed Analysis:

1. Validity and Quashing of the Impugned Standing Orders:
The Petitioner challenged the vires of Standing Order No.7493/99 dated 3rd December 1999 and its subsequent amendment in Standing Order No.44/2016 dated 8th July 2016, arguing that these orders were contrary to the Customs Act, 1962. The Court, however, did not find it necessary to deal with this challenge, referencing the Supreme Court case of Varsha Plastics Pvt. Ltd. v/s. Union of India, which held that the Standing Orders are not binding but serve as guidelines to streamline the functioning of Customs Officers.

2. Release of Imported Goods Based on the Invoice Price:
The Petitioner sought a writ of mandamus commanding the Respondents to release the imported goods by accepting the price indicated in the invoice and declared in the Bill of Entry. The Court noted that the goods were withheld due to alleged mis-declaration of value, as the unit price in the commercial invoices was lower than the rates found on the S&P Global Platts website. The adjudicating authority re-determined the value and imposed a fine and penalty, leading to the confiscation of goods.

3. Compensation for Costs and Losses Due to Detention of Goods:
The Petitioner claimed compensation for ascertainable costs and losses, including detention charges and CFS ground rent charges, due to the alleged failure of the Respondent-Authorities to clear the goods for home consumption. The Court did not specifically address this issue in the final judgment.

4. Interim Stay on the Operation of the Impugned Standing Orders:
Pending the hearing and final disposal of the writ petition, the Petitioner sought a stay on the operation of the impugned Standing Orders. The Court passed several interim orders, directing the Respondents to file affidavits and produce records but did not grant a stay on the Standing Orders.

5. Procedural Irregularities in the Adjudication Process:
The Court found significant procedural irregularities in the adjudication process. The adjudicating authority recorded the operative part of the order on 4th September 2020 without providing reasons, which were later included in a typed speaking order signed on 24th September 2020. The Court criticized this approach, stating it was against the basic tenets of conduct by quasi-judicial authorities. The Court highlighted the need for a speaking order that contains all details, clear findings, and reasons, as required by the Customs Act and relevant circulars.

Conclusion:
The Court set aside the order in original dated “4th September 2020 signed on 24th September 2020 and issued on 24th September 2020” due to procedural irregularities. It directed the Respondent No.2 to appoint another officer to hear the case afresh and pass a speaking order with reasons within two weeks. The Court maintained the status quo concerning the goods under Bill of Entry No. 8389492 dated 6th August 2020 and did not express any opinion on the merits of the matter. The writ petition was disposed of in these terms, and there was no order as to costs. The interim application was also disposed of accordingly.