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TMI Blog2011 (3) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... of Imported Goods) Rules, 2007, Habeas Corpus Petition is allowed and the impugned detention order of the first respondent in Detention Order set aside - 1621 of 2010, - - - Dated:- 31-3-2011 - C. Nagappan and P.R. Shivakumar, JJ. S/Shri R. Thiyagarajan, Sr. Counsel for A. Ganesh, for the Petitioner. S/Shri A.D. Jagadish Chandira, APP and T.R. Senthilkumar, SSC, CBEC, for Respondent. [Order per : P.R. Shivakumar, J.]. The petitioner, who was detained by an order of detention passed under Section 3(1)(i) of the Conservation of Foreign Energy and Prevention of Smuggling Activities, 1974 (COFEPOSA Act) by the impugned order of the first respondent made in G.O. No. SR.I/535-4/2009 dated 8-10-2009, has come forward with the present Habeas Corpus Petition challenging the said order of detention and seeking an order for his release. 2. The facts leading to the detention of the petitioner Stephen Stanislaus Rosario, in brief, are as follows :- (i) The petitioner Stephen Stanislaus Rosario was running a business in the name and style of M/s. Zandra Trading Company as a sole Proprietorship concern. He had also got an Import and Export Code number and the said b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lared by the exporter as Industrial Salt was seized from the M/s. Viking Warehousing Container Freight Station under a mahazar on 6-8-2009. (iii) Subsequently, a search was conducted at the premises of M/s. Zandra Trading Company at D-43, 2nd Main Road, Vel Murugan Nagar, Kosapalayam, Puducherry-605 013 (formerly Pondicherry) on 28-7-2009 and certain incriminating documents found therein were seized. Petitioner Stephen Stanislaus Rosario also gave a voluntary confession statement on 12-8-2009 and the same was recorded under Section 108 of the Customs Act, 1962, which disclosed that M/s. Zandra Trading Company was run by him as a sole Proprietorship concern from the year 2007 with its IE Code No. 2506000879. The samples drawn from the consignments were also sent to Customs House laboratory for analysis. The Joint Director of Customs House laboratory after analyzing the samples gave a report that the samples contained composition of Potassium Chloride and small amounts of compounds of Sodium, Calcium, Magnesium and Iron. In the said report, the Joint Director of Customs house laboratory also stated that an expert opinion from the Dy. Director, Regional Fertilizer Control Laborato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the report of the Dy. Director, Regional Fertilizer Control Laboratory is inconclusive, since he declined the analysis of the samples, as they were not drawn by the Fertilizer Inspectors in accordance with the statutory rules. If the report of the Dy. Director, Regional Fertilizer Control Laboratory, Madhavaram, Chennai is excluded, as it does not give any clear cut opinion as to whether the contraband was Potassium Chloride (Muriate of Potash), the other two reports, one from the Coromandel Fertilizers Limited and the other from the Customs House laboratory, could not be relied on, as none of he laboratories was a notified laboratory on the relevant date. Even among the test reports of the said institutions, the eport of Coromandel Fertilizer Limited simply states the percentage of elements and the same does not give a concrete opinion as to whether the representative samples are Potassium Chloride (Muriate of Potash) or Industrial Salt. The report of the Customs House laboratory is also inconclusive in so far as it directs further reference to the Dy. Director, Regional Fertilizer Control laboratory for an expert opinion as to whether the contraband is Muriate of Potash. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pping Bill Nos. 3439419, 3439432, 3439395, 3439421 and 439424 dated 23-7-2009. The 50 MTs of export goods declared as Industrial Salt found at M/s. Viking Warehousing Container Freight Station, Chennai, was covered by bill No. 3429962 dated 14-7-2009. The samples drawn from 50 MTs seized from M/s. Viking Warehousing Container Freight Station, Chennai, were not sent to Coramandel Fertilizer Limited laboratory. On the other hand, the sponsoring authority took it to be Muriate of Potash based on the alleged test report produced by the Export Manager of the detenu. The test report allegedly produced by le Export Manager is undated. A copy of the said certificate allegedly produced by Gopinath, the Export Manager of M/s. Zandra Trading Company, is found at page No. 128 of the booklet. The same is found prepared in the letter head M/s. Zandra Trading Company and was signed by Gopinath as Export Manager. Of course the said certificate has described the consignment as Industrial Salt (Drilling Chemcial). The following chart is also provided, parameters Observation (% bt wt.) Moisture Content Insolubles Ca as CaCl 2 Mg as MgCl 2 Na as NaCl KCl 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record to show that the samples were tested in any laboratory and there are communications to the effect that the customs authorities simply relied on the alleged certificate of analysis produced by the Export Manager, a copy of which is found in page No. 128 of the booklet. Samples drawn from the consignments found at M/s. A.S. Shipping Container Freight Station terminal alone were tested in the laboratory attached to Coromandel Fertilizers Limited and also in the Customs House laboratory, Chennai. But, curiously, the Customs House laboratory, Chennai gave a report containing the following particulars. The sample is in the form of predominantly reddish coloured together with white coloured crystalline powder. It is composed of Potassium Chloride with small amounts of compounds of Sodium, Calcium, Magnesium and Iron. In order to ascertain whether the sample u/r is classifiable as-Muriate of Potash (MOP) an expert opinion may be obtained from the Dy. Director, Regional Fertilizer Control Laboratory, Ministry of Agriculture, Government of India, Madhavaram Milk Colony Post, Chennai-600 051, Ph.No : 044-25552744/25558328. Regarding Industrial salt, no literature is availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhubaneshwar, Hissar, Imphal, Jabalpur and Nagpur or in any other laboratory notified by the Central or State Government. (2) Every laboratory referred to in sub-clause (1) shall, in order to ensure accurate analysis, of fertiliser samples, possess minimum equipment and other laboratory facilities, as may be specified from time to time by the Controller n this behalf. 11. Admittedly, neither Coramandel Fertilizers Limited nor the Customs House laboratory is one of the testing institutes named in Clause 29 of the Fertilizer Control Order, 1985. None of the said laboratories come under the notified laboratories for the purpose of Fertilizer (Control) Order, 1985. In the list of the laboratories notified under Clause 29 of the Fertilizer (Control) Order, 1985 relating to Tamil Nadu, only 14 laboratories are found and the name of the Coromandel Fertilizer Limited and Customs House laboratory are not found. Therefore, apart from the fact that the reports are inconclusive, they are also of the report of laboratories neither named in Clause 29 of the Fertilizer Control) Order, 1985 nor notified under Clause 29 of the Fertilizer (Control) Order, 1985 and hence they are unreliable. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said Rules deal with the method of valuation of imported goods. As rightly pointed out by the learned senior counsel for the petitioner, none of the procedures contemplated under the said rules was followed. As no material is found in the booklet containing copies of the materials placed before the Detaining Authority as to the basis on which the valuation was arrived, more particularly in the light of the fact that there is a wide difference between the valuation given by the exporter and the valuation arrived at by the customs authorities, the sponsoring authority ought to have clarified as to how the valuation came to be made at a higher rate than the declared value or the Detaining Authority ought to have called for clarification in this regard. The failure to do so, as rightly contended by the learned senior counsel, shows non-application of mind on the part of the Detaining Authority, which will vitiate the order of detention. It is pertinent to note that this Bench, on an earlier occasion, in A. Sundaran v. The State of Tamil Nadu rep. by the Secretary to Government, Public (S.C.) Department, Fort St. George, Ch-9 and others reported in 2010 (2) TNLJ 51 (Criminal) = ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia and Others v. Amratlal Prajivandas and Others [(1994) SCC (Cri) 1325] (Constitution Bench) and 2. Union of India and Another v. Chaya Ghoshal (Smt.) and Another [(2006) 1 SCC (Cri) 257]. In view of the settled proposition declared by the highest court of this country, which is that law of the land, we are not inclined to accept the contention of the learned Senior Counsel that the impugned order of detention based on solitary instance is unsustainable. The impugned order cannot be set aside on the said score alone and the arguments advanced in this regard on behalf of the detenu has got to be discountenanced. 15. For all the reasons stated above, we come to the conclusion that the impugned order of detention dated 8-10-2009 passed by the first respondent in G.O. No. SR.I/535-4/2009 stands vitiated on the ground of non-application of mind since the subjective satisfaction of the detaining authority regarding the description of the contraband is based on inconclusive test report and on reports obtained from laboratories, which are not notified and also on the ground that the valuation was not made as per Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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