2020 (11) TMI 689 - HC - Customs

Reclaim of goods after surrender of rights in warehoused Goods (after import) u/s 23(3) - Due to increased customs duty, the plaintiffs could not take the delivery of the goods - Decree of mandatory injunction directing the defendants to deliver 58 bales, 76 bales and 61 bales respectively of the goods amenable to customs duty - defendants took the plea that the plaintiffs themselves have surrendered the goods in terms of Section 23(3) of the Customs Act vide letter dated 10-12-1985 and therefore, no cause for the plaintiffs to file the suit was made out - Section 23 of Customs Act - HELD THAT - Learned Counsel for the respondents could not show any such document or evidence that they have availed of the remedy provided under the Customs Act. The Customs Act which being a special Act has provided remedial action against the orders of the authorities and which the plaintiffs failed to have recourse to and therefore, having failed to exhaust the departmental remedies provided under the Act, the plaintiffs to the mind of this Court cannot have resort to general provisions by way of filing civil suit seeking mandatory injunction. More so, even in the suit the plaintiffs have not challenged the letter dated 25-2-1986 by which the Collector, Central Excise and Customs disallowed clearance of the goods, therefore, by resorting to such a suit the plaintiffs cannot bypass the administrative order which was never put to challenge either in the hierarchy of the Act or even in the suit. The Learned Trial Court has rightly held while deciding issues No. 1 to 3 that since plaintiffs have surrendered the goods in terms of Section 23(2) of the Customs Act and therefore, are not entitled to any mandatory injunction nor have ever availed of the remedy provided by way of appeal under the Customs Act - In the impugned findings the Learned First Appellate Court has failed to appreciate this important aspect of the evidence and the admitted facts and by mis-construing the truth on the records has arrived at a totally perverse and illegal finding purely on the grounds that the act of the department for not supplying the orders was mala fide and that is how the decision stood reversed. Since the plaintiffs have initially surrendered their right and claim over the goods, now they cannot reverse their stand and re-claim the same after inordinate delay without assigning any sufficient condonable reasons for the same. Rather what appears is that the suit filed by the plaintiffs is an afterthought belated machination by misuse of the process of the Court - the impugned findings reversing the judgment of the Trial Court are highly erroneous and need to be set aside by way of acceptance of the instant appeal. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Surrender of goods under Customs Act
2. Entitlement to mandatory injunction
3. Jurisdiction of the Court
4. Competency of the suit without notice under CPC
5. Valuation of the suit for court fee and jurisdiction
6. Relief sought

Analysis:

1. The plaintiff, a firm dealing in import of white synthetic thread waste, filed a suit seeking a mandatory injunction against the defendants, including the Assistant Collector, Central Excise and Customs, to deliver certain goods subject to customs duty. The plaintiff alleged that despite having a valid import code, the defendants refused to deliver the goods, leading to a penalty imposition. The plaintiff claimed entitlement to the goods, which were not handed back after a reduction in customs duty rate, prompting the suit.

2. The defendants contended that the plaintiff surrendered the goods under Section 23(3) of the Customs Act, making the suit baseless. The Trial Court dismissed the suit, but the Additional District Judge allowed the appeal. The appellant Union of India challenged the decision in a regular second appeal.

3. The recent Supreme Court judgment clarified that no substantial question of law is required for appeal disposal under Section 41 of the Punjab Courts Act, applicable to Punjab and Haryana.

4. The plaintiffs admitted relinquishing their right over the goods due to increased customs duty. The defendants claimed that the goods became government property as per Section 23 of the Customs Act. The plaintiffs failed to exhaust departmental remedies, such as appealing to the Commissioner (Appeals) under Section 128 of the Customs Act, before resorting to a civil suit for a mandatory injunction.

5. The Court noted that the plaintiffs did not challenge the Collector's letter disallowing clearance of goods, and the plaintiffs' failure to avail themselves of the remedies under the Customs Act precluded them from seeking a mandatory injunction through a civil suit.

6. The Court found that the plaintiffs' attempt to reclaim the goods after surrendering them without valid reasons was an afterthought, indicating misuse of the legal process. The impugned findings were deemed erroneous, and the appeal was allowed, setting aside the decision that favored the plaintiff.

This detailed analysis of the judgment highlights the key issues, arguments, and reasoning behind the decision of the High Court in the case.