2002 (9) TMI 117 - HC - Customs

Summary

Issues Involved:
1. Legality of importing fresh garlic without a license.
2. Validity of public notices and circulars issued by the Customs Authorities.
3. Discretion of the Customs Officer under Section 125 of the Customs Act.
4. Applicability of international agreements and principles of reasonableness.
5. Availability and adequacy of appellate remedies.

Summary:

1. Legality of Importing Fresh Garlic Without a License:
The petitioners imported fresh garlic, a restricted item, without obtaining the necessary license, knowing that the goods were liable to be confiscated. They expected to be given the option to pay a fine in lieu of confiscation u/s 125 of the Customs Act, 1962. However, a public notice dated 20-06-2002 and a circular dated 25-06-2002 mandated re-export of such goods without the option of paying a fine.

2. Validity of Public Notices and Circulars:
The petitioners argued that the public notices and circulars were ultra vires Section 125 of the Customs Act and lacked legal sanction. They contended that policy decisions should be made by the Ministry of Commerce, not the Ministry of Agriculture, and that the notices were arbitrary and discriminatory, violating Article 14 of the Constitution. The court found that the public notice and circular were not published in the official gazette as required u/s 3(2) of the Foreign Trade (Development and Regulation) Act, making them invalid.

3. Discretion of the Customs Officer Under Section 125 of the Customs Act:
Section 125(1) of the Customs Act provides the Customs Officer with discretion to offer the option to pay a fine in lieu of confiscation for prohibited goods. The court held that this discretion cannot be taken away by executive orders or public notices. The officer must adjudicate each case individually to decide whether to allow the option to pay a fine or to order absolute confiscation.

4. Applicability of International Agreements and Principles of Reasonableness:
The petitioners argued that re-exporting garlic imported from China would violate GATT principles and be discriminatory. The court noted that international agreements apply only if consistent with domestic law. The domestic law treated fresh garlic as a prohibited item, and the petitioners had no fundamental right to import without a license.

5. Availability and Adequacy of Appellate Remedies:
The court acknowledged that the appellate remedy might be ineffective due to the binding nature of the impugned circulars on the appellate authority. Therefore, the writ petition was maintainable.

Conclusion:
The public notice dated 20-06-2002 and the circular dated 25-06-2002 were quashed. The matter was remanded to the Collector of Customs to exercise his discretion u/s 125 of the Customs Act and decide whether to permit the petitioners to pay a fine in lieu of confiscation or to order absolute confiscation of the goods. The writ petitions were partially allowed, and no costs were awarded.