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TMI Blog1984 (3) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... x 9 of the Import Policy. (b) What is canalised by Appendix 9 are the Active Ingredients of drugs named in Appendix 9, as Active Ingredients and not in any other form. (c) The Asstt. Drug Controller of the Customs House as well as the other testing laboratories have certified that the goods are not of the descriptions mentioned in Sl. No. 14 of para 3 in Appendix 9 and the Respondent has not given any reason for brushing aside and not following the said certificates. (d) Respondent has ignored the fact that cost of Hexahydrate is twice that of imported which by itself proves what is stated in item (c) above. The appellants gave their readiness to execute a personal bond or furnishing a bank guarantee for the amount or fine as a condition precedent to clearance of the goods. 2. Shri Patel, a Partner who was heard on behalf of the applicant briefly referred to the facts leading to the confiscation and imposition of fine in lieu of confiscation, and requested for release on furnishing a bond with a bank guarantee. He did not raise the ground of financial hardship as such, but stated that payment of this heavy fine would mean taking out that much fund from the business and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no compulsion. Hence there can be no stay. When the legislature in its wisdom has kept such matters out of the scope of Section 129-E, as also the procedure rules, it would be inappropriate to extend our jurisdiction by appealing to ancilary or incidental power. Moreover, a bank guarantee or surety is no substitute for revenue and when the grant of such a facility is not expressly provided for, as in the other two situations covered by Section 129-E, the Tribunal would not have any discretion in this regard. I, therefore, agree with the Departmental Representative and while respectfully differing with the precedent of my brothers cited by Shri Patel, would reject this application for release of the confiscated goods on a guarantee. If the option is not exercised the goods should remain in custody and all that can be done is to order that pending the appeal, they may not be auctioned and an early date for hearing the appeal be fixed, so that any deterioration in quality or other possible loss is obviated. The application is accordingly rejected. S.P. (Bom.) No. 283 of 1983 (in C.D. (Bom.) Appeal No. 1295 of 1983) 5. This stay application arises out of Order-in-Original No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e imported goods are not a drug canalised under Appendix 9 of the import policy. (b) What is canalised by Appendix 9 are the Active ingredients of drugs named in Appendix 9, as Active ingredients and not in any other form. (c) The Asstt. Drug Controller of the Customs House as well as the Chemical Laboratory and Italab Laboratory Ltd., have categorically certified on the basis of composition analysis that the imported goods are neither "Piperazine (Diethylene Diamine) anhydrous" nor "Piperazine (Diethylene Diamine) Hexahydrate" mentioned at Sl. No. 14 of Para 3 of Appendix 9. The Respondent Collector has not given any reason whatsoever for brushing aside and not following the said Certificates. The Respondent has ignored the fact that the cost of Hexahydrate is double that of imported goods. 11. During the consideration of the applications, Shri C.R. Patel, the learned Advocate for the applicants submitted that the applicants would be put to considerable hardship if they are not permitted to get the goods released by executing a Bank Guarantee. He further submitted that payment of heavy fine imposed would jeopardise the business. It was further urged by Shri Patel that co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Shri K.S. Dilipsinhji, had been referred to by the President under Section 129-C of the Customs Act to the Senior Vice-President Shri Venkatesan, dealing with the jurisdiction to grant stay in respect of matters which are not covered by the Act. This is what the learned Senior Vice-President observed in paragraph 21 : "Reference has been made to the order dated 5-5-1983 of the West Regional Bench which has been cited by the Departmental Representative, and in which a view was taken that a stay could not be granted in such a case. It has been observed therein that the goods were not under Customs control and therefore there were no grounds for the grant of a stay. No view has been expressed as to whether an appeal lies or does not lie in such a case. So far as the question of stay is concerned, the order has not gone into the question of the distinction between waiver of pre-deposit of duty under Section 129-E, Customs Act and grant of stay of realisation. It is quite true that the question of pre-deposit does not arise in respect of goods which are under the control of the Customs authorities. Accordingly, the question of waiver of pre-deposit in terms of the proviso to Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coming to the merits of the case, as has been stated earlier, the Customs did not confiscate the goods absolutely. Even after coming to the conclusion that the imported goods are canalised items, it permitted the clearance on payment of fine in lieu of confiscation. Shri Jain did not contend that the Tribunal has no power to set aside the order of the learned Additional Collector on consideration of the appeal. As a matter of fact, to the specific query of my learned brother, Shri Jain submitted that the Bench has power to reduce or even waive the fine altogether when deciding the appeal. The grant of stay is an interim relief and it is a discretionary relief. The authority vested with the discretion shall have to exercise the discretion judiciously and not arbitrarily or capriciously. It also cannot refuse to exercise the discretion if the circumstances and facts of the case warrant exercise of such a discretion. The only point of difference between the Department and the applicant is that the Department has no objection to release the goods if fine amounts are paid. The applicants, however, find it difficult to pay the full fine amount as it would affect their business but willin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ekhi, Member (T)]. - 20. Since there was difference of opinion between the learned Member (Technical) and learned Member (Judicial) who heard these applications for interim relief earlier, the matter has been assigned by the President to me for disposal under Section 129-C(5) of the Customs Act, 1962. 21. After giving due notice, I have heard the applicants (represented by Shri C.R. Patel, Advocate) as well as the respondent (represented by Shri J.M. Jain, SDR) 22. The applicants relied on the case law cited in the learned Member (Judicial's) Order to say that this Tribunal had jurisdiction to grant the interim relief asked for. They added that they had already paid for the value of the goods (about Rs. 3.75 lakhs). In addition, customs duty of a little over Rs. 4.00 lakhs was payable. Since the goods were held up in the docks for the last one year, demurrage may have to be paid to the Port Trust Authorities. If, over and above all these, the applicants were called upon to pay the redemption fine of Rs. 4.00 lakhs, imposed in these two cases, it would be a financial strain on them. They stated that there would be no loss to the Government if their request was granted since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest of revenue. In my view, these are sound principles for considering the stay of payment of redemption fine as well even though Section 129-E as such does not apply to payment of redemption fine. Ordinarily speaking, there should be no question of undue hardship in the matter of payment of redemption fine. It is common knowledge among the importing community that the redemption fine adjudged in respect of the imported goods is normally not in excess of the margin of profit on the goods. In other words, the redemption fine is a part of the market value of the goods. The case of penalty is different inasmuch as the pentalty comes out of the pockets of the importer. But the redemption fine only neutralises the importer's profit, in part or in full. On payment of the redemption fine, the importer gets possession of the confiscated goods which otherwise vest in the Government. The importer can realise his profit by trading the goods as such or after subjecting them to further manufacture etc. So far as the present two cases are concerned, it has not been shown that the impugned orders are palpably bad on the face of them. The only hardship involved in paying the fine that has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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