2024 (9) TMI 1434 - HC - Customs

Classification of imported goods - prohibited goods - whether the goods imported fall under category of silver jewellery which is freely importable or under restricted category of ITC (HS) Code 71069210? - HELD THAT - The Apex Court in the case of Bilkis Yakub Rasool V Union of India Others 2024 (1) TMI 1318 - SUPREME COURT reiterated the principle that the jurisdiction of the Supreme Court under Article 32 and of the High Court under Article 226 of the Constitution is extraordinary, equitable and discretionary and it is imperative that the petitioner approaching the Writ Court must come with clean hands and put forward all the facts before the Court without concealing or suppressing anything and seek an appropriate relief. The jurisdiction exercised by this court under Article 226 is extraordinary, equitable and discretionary and it was imperative that petitioner must have come with clean hands and put forward all the facts before the Court without concealing or suppressing anything and seek an appropriate relief. If there is no candid disclosure petitioner is guilty of misleading the Court and his petition should be dismissed at the threshold without considering the merits of the claim. Petitioner having made false averments in the petition that it was a registered partnership firm and reiterating the same during the course of arguments and that also in response to a specific query raised on by the court, in our view, has abused the process of law. The petitioner is not entitled to the extraordinary, equitable and discretionary reliefs - petition dismissed.

Issues Involved:
1. Classification of imported goods.
2. Provisional clearance of goods.
3. Application of Section 125 of the Customs Act, 1962.
4. Reliability of the examination report.
5. Submission of bank guarantee and bond.
6. Misrepresentation by the petitioner regarding registration status.
7. Legal consequences of misrepresentation and suppression of facts.

Detailed Analysis:

1. Classification of Imported Goods:
The primary issue was whether the imported goods fall under the category of "silver jewellery" which is freely importable or under the restricted category of ITC (HS) Code 71069210. The petitioner argued that the goods were jewellery or, at worst, semi-finished jewellery, both of which are importable without restriction. The revenue contended that the goods were crude rounded structures made of embossed silver strips, assembled to look like bangles. The court noted that the samples shown appeared to be bangles, aligning with the revenue's description.

2. Provisional Clearance of Goods:
The petitioner sought provisional clearance of the goods, even if they were classified as restricted. The court considered this request, noting that the petitioner was willing to comply with any terms and conditions set by the court for provisional clearance.

3. Application of Section 125 of the Customs Act, 1962:
The petitioner relied on Section 125 of the Customs Act, 1962, which allows for the release of prohibited goods on terms and conditions set by the proper officer. The court reiterated the provisions of Section 125, emphasizing that the officer adjudging confiscation may offer the owner an option to pay a fine in lieu of confiscation. The fine should not exceed the market price of the goods, less any duty chargeable.

4. Reliability of the Examination Report:
The revenue's examination report dated 5th June 2024 described the goods as crude rounded structures made of embossed silver strips. The court found the report unreliable, noting that it was based on visual examination and contained a disclaimer stating "as per our best knowledge," without explaining the basis of this knowledge.

5. Submission of Bank Guarantee and Bond:
The petitioner proposed to provide a bank guarantee for 50% of the value of the goods, which was rounded off to Rs. 3,00,00,000/-. The court agreed that upon submission of this bank guarantee, the petitioner could provisionally clear the goods. Additionally, a bond for 100% of the value of the goods was required from the partnership firm and its partners in their individual capacities.

6. Misrepresentation by the Petitioner Regarding Registration Status:
The court discovered that the petitioner had falsely claimed to be a registered partnership firm. Despite initially agreeing to provide registration details, the petitioner later attempted to clarify that they were registered with GST and Income Tax authorities, not under the Partnership Act, 1932. The court found this explanation unacceptable, noting that the petitioner had made an incorrect statement knowingly.

7. Legal Consequences of Misrepresentation and Suppression of Facts:
The court cited several precedents, emphasizing the importance of coming to court with clean hands. It referenced cases such as Anand Nagar and Co. vs Chief Commissioner of Income-tax, Dalip Singh vs State of Uttar Pradesh, and Bilkis Yakub Rasool vs Union of India, underscoring that fraud and misrepresentation vitiate judicial proceedings. The court concluded that the petitioner had abused the process of law by making false statements and was not entitled to any relief. Consequently, the petition was dismissed.

Conclusion:
The petition was dismissed due to the petitioner's misrepresentation regarding their registration status and the suppression of material facts. The court emphasized the importance of truthful disclosure in judicial proceedings and denied any relief to the petitioner, reinforcing the principle that fraud and deception undermine the integrity of the judicial process.

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