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TMI Blog2017 (2) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... 611465 dated 22.10.2013. Whereas Writ Appeal No.822 of 2016 arises out of W.P.No.30790 of 2016, which in turn is directed against the order passed on 09.09.2015 by the Additional Commissioner of Customs (Gr.2), Customs House, Chennai, with a direction to provisionally release the goods covered by the Bill of Entry No.3611465 dated 22.10.2013. 3. Since the issue raised in both the writ petitions arise out of the same Bill of Entry and also the same set of facts are involved in both the cases, they were heard together and dismissed by the common order which is under appeal. 4. As it is convenient in all respects, both these writ appeals are heard together by us and they now stand decided by this common Judgment. 5. The case, as is set up by the writ petitioner firm, is that it is a proprietary concern of Shri Mahesh Kumar Singh and that it is engaged in the business of import and trading of various cosmetics and other goods. The said proprietary concern had been granted the Import-Export Code bearing No.0412028522. It is the further case that the said proprietary concern has executed necessary power of attorney in favour of Shri L.Ibrahim, son of Shri Liaquath Ali, to conduct the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional release of goods, as the show cause notice under Section 124 of the Act, had not been issued to him, as mandated under Section 102 (2) of the Customs Act. 8. It is thereafter, on 20.05.2014, the Commissioner of Customs House, Chennai, invoking the proviso to Section 110 (2) of the Act, has proposed to extend the period for issuance of show cause notice under Section 124 of the Act, by a further period of six months, in the process, reckoning the date of seizure of the consignment as 03.12.2013. Time was granted up to 28.05.2014 for filing the objections. Accordingly, objections were lodged on 27.05.2014 pointing out that no show cause notice having emanated within a period of six months reckoned from the date of detaining the goods on 28.10.2013 or even 11.11.2013, the goods are liable to be released unconditionally. The petitioner has at that stage instituted W.P.No.9678 of 2014 in this Court, seeking a writ of mandamus to complete the adjudication proceedings immediately. This Court has disposed of the said writ petition by its order dated 12.06.2014 directing the respondents therein to complete the adjudication proceedings as expeditiously as possible preferably within a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the order dated 09.09.2015. 12. As already noticed supra, both these writ petitions came to be dismissed by the common order rendered by our learned brother M.Duraiswamy,J on the ground that the Appellate remedy available under Section 128 of the Act, has not been availed. Hence, these appeals. 13. Heard Shri Vijay Narayanan, learned Senior Counsel for the appellant and Mrs.R.Hemalatha, learned Standing Counsel for the Customs Department. 14. At the very outset, Sri Vijay Narayanan, learned Senior Counsel would contend that the rule requiring exhaustion of statutory remedies before the writ will be issued is a rule of policy, convenience and discretion rather than a rule of law. Availability of other adequate remedies was not an absolute bar for grant of a writ when patent illegality was committed. Since the said proposition of law was laid down by the Supreme Court in the State of Uttar Pradesh V. Mohammed Nooh (AIR 1958 SC 86), A.V.Venkateswaran, Collector of Customs, Bombay V. Ramachand Sobharaj Wadhwani (AIR 1961 SC 1506), Calcutta Discount Co. Ltd., V. Income Tax Officer (AIR 1961 SC 372) and Whirlpool Corporation V. Registrar of Trade Marks (1998 (8) SCC 1) we, proceeded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 2 thereof. Clause (2) defines expression "assessment" as "(2) assessment includes provisional assessment, self-assessment, re-assessment and any order of assessment in which the duty assessed is nil;" Clause (4) defines "Bill of Entry" as bill of entry means a bill of entry referred to in section 46;" and Customs area in Clause (11) as customs area means the area of a customs station and includes any area in which imported goods or export goods are ordinarily kept before clearance by Customs Authorities;", "Entry" in Clause (16) as entry in relation to goods means an entry made in a bill of entry, shipping bill or bill of export and includes in the case of goods imported or to be exported by post, the entry referred to in section 82 or the entry made under the regulations made under section 84" and "imported goods" in Clause (25) as imported goods means any goods brought into India from a place outside India but does not include goods"which have been cleared for home consumption;", "importer" in Clause (26) as importer , in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the permission in writing of the proper officer. (3) Notwithstanding anything contained in any law for the time being in force, if any imported goods are pilfered after unloading thereof in a customs area while in the custody of a person referred to in sub-section (1), that person shall be liable to pay duty on such goods at the rate prevailing on the date of delivery of an import manifest or, as the case may be, an import report to the proper officer under section 30 for the arrival of the conveyance in which the said goods were carried." 18. It is, thus, abundantly clear from Section 45 of the Act that all imported goods, unloaded in a Customs area, shall remain in the custody of such person as may be approved by the Commissioner of Customs until they are cleared for home consumption or warehoused or transshipped in accordance with the provisions of Chapter VIII. Sub-section (2) thereof further makes it clear that the person having custody of any imported goods in a Customs area shall keep a record of such goods and shall not permit such goods to be removed from the Customs Area or otherwise dealt with except by any permission granted by proper Officer. Thus, the importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery right to exercise full power and control over the imported goods under Section 45 of the Act, till such time they are properly cleared. 19. Section 110 of the Act has provided for seizure of goods, documents and other things. It has set out that if the Proper Officer has reason to believe that any goods are liable to confiscation under the Act, he may seize such goods and where it is not practicable to seize any such goods, the Proper Officer may serve on the owner of the goods an order that he shall not remove, part with or other wise to deal with the goods except with previous permission of such Officer. Sub-section (2) of Section 110 reads as under:- " (2) Where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized: Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the Commissioner of Customs for a period not exceeding six months." The above provision makes it clear that if no notice under Section 124 of the Act is issued within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Inspectors (Preventive - SIIB) in the presence of two witnesses and before the Superintendent of Customs SIIB and the importer was given a copy thereof. The examination report, is noted as under:- " Thereafter, all the carton boxes were stuffed back into the same container and the said container was sealed with the Customs One Time Seal No.UCN16194......." From the above statement, the learned Senior Counsel would draw an inference that the importer has been effectively denied access to the imported goods and their usage and hence such act of the Customs Inspector in sealing the container would amount to seizure of the imported goods. Any such denial of control and usage of the imported goods would amount to seizure of the goods itself. In principle, there is no distinction in between the seizure of goods and sealing of the container containing the imported goods. Learned Senior Counsel places reliance upon the Judgment of the Calcutta High Court in ESI Limited vs. Union of India 2003 (156) ELT 344 in support of this plea. 23. The contention canvassed in this regard is not liable to be accepted, for, separate proceedings have been drawn on 03.12.2013 at 15 hours. During the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, a case of sealing the container with a view to preserve the integrity of the imported goods contained in various cartons loaded therein, till the necessary follow up action under the Act is taken up. If the container were not to be sealed, the imported goods would get exposed to the grave risk of being pilfered. In which event, it is the Customs Officer to whom the custody of the goods are entrusted becomes liable to pay duty on such goods as per the provisions contained in sub-section (3) of Section 45 of the Act, but not the importer. It is with a view to prevent any such ill effects flowing on to the authorities of the Customs, the container has been sealed using the One Time Seal of the Customs on 12.11.2013. Whereas actual seizure of the goods has taken place only on 03.12.2013, based upon the factual finding that an attempt has been made to smuggle certain goods. The fundamental requirements for effecting seizure of goods is the reason to believe that the goods are liable to be confiscated under the Act. Hence, only upon there being a reason to believe that the goods are liable to be confiscated under the Act, any such goods then can be seized. Under Clause (f) of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect from 12.11.2013, the importer has been denied effective control over the goods and hence the same amounts to seizure of the goods itself, is inspired by the reasons contained in the judgment rendered by the Division Bench of Calcutta High Court, in E.S.I. Ltd. vs Union Of India (Uoi) (2003 (158) E.L.T. 344 (Cal.), which is to the following effect:- 7. Appearing in support of the appeal, Mr. Ajit Kumar Panja submitted that the decision of the learned Single Judge was based on an erroneous finding that the detention of the goods on 9th November, 2000, did not amount to seizure within the meaning of Section 110(1) of the Customs Act, 1962, and that actual seizure of the goods took place on 1st March, 2001, Mr. Panja submitted that although the proviso to Sub-section (1) of Section 110 of the said Act provides that where it is not practicable to seize the goods, the owner of the said goods could be directed by an order not to remove, part with, or otherwise deal with the goods except with the previous permission of the concerned officer, in the instant case the dominion over the goods went out of the hands of the appellants as soon as on 22nd November, 2000, the rooms in which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered, in the course of their judgment, the salutary provisions contained in sub-section (1) of Section 45 of the Act. Wherein it is clearly set out that all imported goods unloaded in a Customs area shall remain in the custody of such person as may be approved by the Commissioner of Customs until they are cleared for home consumption or are warehoused or transshipped in accordance with the provisions contained in Chapter VIII of the Act. Similarly, under sub-section (2) of Section 17 of the Act, the Proper Officer is empowered to verify the self-assessment of the imported goods and for that purpose examine or test any imported goods as may be necessary. It is thereafter, the Proper Officer may reassess the duty leviable on such goods if he is satisfied that the self assessment made by the importer is not correctly done. 29. Therefore, the examination of the imported goods undertaken on 11.11.2013 and completed on 12.11.2013 by the Customs Authorities is in accordance with the power conferred on them under sub-section (2) of Section 17 of the Act and without undertaking any such examination, perhaps the correctness or otherwise of the self-assessment made by the importer cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a different matter that such goods are still liable for reassessment or even confiscation proceedings subsequently. But in such a case, if the person from whose custody the goods have been seized, if he is not issued with the show cause notice under Section 124 of the Act within the period of six months prescribed by sub-section (2) of Section 110, such a person can seek release of such goods, but certainly not in cases where the goods have not yet been cleared for home consumption. Hence, the action of the Customs in not releasing the goods unconditionally can not be faulted. The writ petition seeking unconditional release of goods, hence lacks merit. 32. The other writ appeal arises out of writ petition 30790 of 2016, which is directed against the Order in Original dated 09.09.2015, passed by the Additional Commissioner of Customs, confiscating the cosmetics which have been imported unauthorizedly, which are valued at more than one Crore of rupees. Even those Air fresheners/ goods which are imported as per import manifest are also ordered to be confiscated both under Clause (m) of Section 111 and Section 119 of the Act. However, an option has been provided to redeem the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are prohibited under the Act or any other law for the time being in force while the second limb sets out that in case of any other goods he shall provide an option to pay redemption fine. Section 125 of the Customs Act reads as under:- "125. Option to pay fine in lieu of confiscation. (1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods 1[or, where such owner is not known, the person from whose possession or custody such goods have been seized,] an option to pay in lieu of confiscation such fine as the said officer thinks fit: Provided that, without prejudice to the provisions of the proviso to sub-section (2) of section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon. (2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1) the owner of such goods or the person referred to in sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bited absolutely and also such goods which are prohibited or restricted or regulated subject to such conditions to be fulfilled either before or after their clearance. 35. The above view point also requires us to examine the legal regime prevailing as of now pursuant to the introduction of Foreign Trade (Development and Regulation) Act, 1992, repealing the Imports and Exports (Control) Act, 1947. The Foreign Trade (Development and Regulation) Act, 1992, authorized under Section 3 thereof the Central Government to make provision for the development and regulation of foreign trade by facilitating imports and increasing exports. Similarly under sub-section (2) of Section 3 of the said Act, the Central Government may also, by Order published in the Official Gazette, make provision for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the Order, the import or export of goods. Under Section 5 of the said Act, the Central Government was also empowered to formulate and announce by notification in the Official Gazette, the 'export and import policy' and to amend suitably ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his regard. ITC (HS) Chapter 33 dealt with Essential Oils and Resinoids, Perfumery, Cosmetic or Toilet Preparations. At the very outset, in the notes appended thereto, it is made clear that this Chapter does not cover soaps or other products of heading 3401. The expression perfumery, cosmetic or toilet preparations in Heading 3307 applies interalia to the products which are listed therein. The goods (products) with which we are concerned in this case have not been demonstrated to fall within this Chapter 33. 37. It also takes us to the notification G.S.R.426(E) dated 19.05.2010 published by the Ministry of Health and Family Welfare Department, Government of India. Through this notification, the Drugs and Cosmetics (4th Amendment) Rules 2010, framed in exercise of powers conferred by Sections 12 and 33 of the Drugs and Cosmetics Act, 1945 have been notified. By this amendment, Rule 129 has been substituted and the new Rule 129 which was brought into force with effect from 1st April, 2011 reads as under:- "129. Registration of cosmetic products imported into the country.- No cosmetic shall be imported into India unless the product is registered under the rules by the licensing aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on vested with the adjudicating authority is required to be exercised in a reasonable manner. If the restriction or regulation relating to import of goods is a condonable restriction, perhaps, the discretion vested under Section 125 of the Act can be exercised by offering an option for payment of redemption fine in lieu of confiscation of the goods. If on the other hand, the restriction is not liable to be condoned or waived by the Commissioner of Customs, the adjudicating authority, but any such restriction or regulation can only be dealt with by some other agency such as for example the Director General of Foreign Trade or the competent authority under the Drugs and Cosmetics Act, there is no way that the adjudicating authority under Section 125 of the Act can effectively waive or condone such restrictions /regulatory regime and then provide for an option for payment of redemption fine. We are therefore, of the opinion that the discretion has been properly and carefully exercised by the Commissioner in the instant case. 39. In the instant case, it is recorded in para 49 of the Order in Original that all cosmetic products including air fresheners and other toiletries which are im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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