2021 (6) TMI 180 - HC - Customs

Maintainability of petition - availability of alternative remedy of appeal - import of second hand goods - refractory bricks - freely importable goods or restricted goods - time limitation - HELD THAT - The issue turns on an interpretation of the policy notification issued by the Director General of Foreign Trade. The customs authority on its own ought not to have interpreted as to whether the goods in question can be called as restricted items. The respondent ought to have sought a clarification directly from the concerned authority in DGFT. In the alternative, the respondent could have mandated the petitioner to move the competent authority under Foreign Trade (Development and Regulation) Act, 1992 and obtain a clarification. Instead of doing so, the respondent applied his own understanding of the policy notification. What the respondent has done is not in accordance with Section 17 of the Customs Act. The respondent authority had acted illegally and in violation of the statutory procedure - matter is remitted to the file of the respondent to pass order afresh in accordance with law - Petition allowed by way of remand.

Issues:
1. Import of secondhand goods without prior authorization from DGFT.
2. Service of impugned order-in-original to the petitioner.
3. Maintainability of the writ petition due to expiration of the limitation period.
4. Jurisdiction of the High Court under Article 226 of the Constitution.
5. Interpretation of policy notifications under the Foreign Trade (Development and Regulation) Act, 1992.
6. Violation of Section 17 of the Customs Act in assessing duty.
7. Prohibition on import of specific goods by DGFT without proper clarification.

Analysis:

1. The petitioner, a licensed importer, imported secondhand goods without prior authorization from DGFT. The respondent contended that since the goods were not capital goods, they required authorization. The impugned order directed confiscation and imposed a penalty after issuing a show cause notice and granting a personal hearing.

2. The petitioner claimed delayed receipt of the impugned order-in-original, citing health reasons and the Covid-19 pandemic. The respondent asserted that the order was served through RPAD, and the petitioner's failure to appeal within the limitation period made the writ petition not maintainable.

3. The High Court considered the maintainability of the writ petition under Article 226 of the Constitution despite the expiration of the appeal period. The petitioner relied on various Supreme Court decisions emphasizing the essential nature of judicial review under Article 226.

4. The Court analyzed the interpretation of policy notifications under the Foreign Trade Act to determine the importability of goods. It highlighted the importance of seeking clarification from DGFT rather than the customs authority's unilateral interpretation.

5. Violation of Section 17 of the Customs Act in assessing duty was addressed. The Court noted that the customs authority should have verified the importability of goods based on DGFT notifications rather than imposing restrictions based on their understanding.

6. A case study on the prohibition of specific goods by DGFT without proper clarification was presented. The Court emphasized the need for authorities to seek clarification before restricting imports and highlighted a similar approach taken in a previous case.

7. Ultimately, the Court found the respondent's actions illegal and in violation of statutory procedures. The impugned order was quashed, and the matter was remitted for fresh consideration in accordance with the law. The Court emphasized the importance of following proper procedures and seeking clarifications from relevant authorities in import matters.

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