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TMI Blog2021 (6) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... d order (as regards leaving of the matter for decision by the Appellate Authority), any direction for release of goods pursuant to the order-in-original could not have been issued - It gets, perforce, reiterated that if the orders-in-original dated 28.08.2020 were to be executed under the mandate of the High Court, the appeals were going to be practically redundant after release of the goods and nothing material was to remain for decision by the Appellate Authority on the main subject matter of the appeal. The High Court has taken into account a few factors standing in favour of the importers like the orders-in-original holding the field; the importers having made the necessary payments; and the importers incurring expenditure because of warehousing. An additional factor had been the High Court's dissatisfaction that the orders dated 01.10.2020 were passed in an improper manner and grounds given therein were not justifying the withholding of the goods. While proceeding on these reasons and considerations, it appears that the other overriding factors like the interest of domestic agriculture market economy totally escaped the attention of the High Court. Thus, the impugned or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry. The unnecessary and baseless arguments raised on behalf of the importers that the goods in question are of 'restricted' category, with reference to the expression 'restricted' having been used for the purpose of the notifications in question or with reference to the general answers given by DGFT or other provisions of FTDR Act are, therefore, rejected. The goods in question fall in the category of 'prohibited goods'. Whether the goods in question are liable to absolute confiscation? - HELD THAT:- Once it is clear that the goods in question are improperly imported and fall in the category of 'prohibited goods', the provisions contained in Chapter XIV of the Customs Act, 1962 come into operation and the subject goods are liable to confiscation apart from other consequences - A bare reading of the provision of Section 125(1) of the Customs Act, 1962 makes it evident that a clear distinction is made between 'prohibited goods' and 'other goods'. As has rightly been pointed out, the latter part of Section 125 obligates the release of confiscated goods (i.e., other than prohibited goods) against redemption fine but, the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ......................................26 Immediate sequels to the orders-in-original................................................31 The order dated 15.10.2020 and its modification dated 09.12.2020: The High Court issues mandamus for release of goods....................................39 Orders dated 24.12.2020 by the Appellate Authority: Orders-in-original set aside with enhancement of penalty.............................................................48 Another round in High Court: Challenge to the order-in-appeal dated 24.12.2020 and stay order by the High Court dated 05.01.2021................56 Rival submissions........................................................................................59 Points for determination...............................................................................77 Legality and validity of the orders passed by the High Court......................78 Whether the goods in question are of prohibited goods category?...........90 Whether the goods in question are liable to absolute confiscation?...........99 Invocation of equity by the importers........................................................ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m orders were again passed; and the importers again proceeded to effect various imports under the cover of such interim orders. 3.2. Faced with such challenges and interim orders in different High Courts, the Union of India filed various transfer petitions, seeking transfer of the cases relating to the same subject-matter to this Court. Having regard to the nature of controversy and surrounding factors, this Court heard the matters on merits so as to finally deal with the challenge to the notifications and the trade notice in question. This led to the judgment dated 26.08.2020 by this Court in the case of Union of India and Ors. v. Agricas LLP and Ors.4 upholding such notifications dated 29.03.2019, issued by the Central Government as also the consequential trade notice dated 16.04.2019, issued by the DGFT. 3.3. In the said judgment dated 26.08.2020, this Court, apart from other findings, held that the importers cannot be said to be under any bona fide belief in effecting the imports under the cover of interim orders; and they would face the consequences in law. While dismissing the writ petitions, this Court held that the imports made while relying on the interim orders were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, before such decision in appeals, the High Court heard the said writ petitions of the importers on 06.10.2020 and proceeded to decide the same by the common order dated 15.10.2020. 5.1. In its order dated 15.10.2020, the High Court took the view that, prima facie, the grounds stated in the order dated 01.10.2020 did not make out any such case of illegality or impropriety as to call for exercise of suo motu revisional powers by the Commissioner Under Section 129D(2) of the Customs Act. Having said that, the High Court left the matter to be decided by the Commissioner (Appeals). However, thereafter, the High Court proceeded to examine the question as to the justification or otherwise for not releasing the goods in question. In this regard, the High Court was of the view that when the orders-in-original were holding the field and the importers had complied with the terms and conditions thereof; and where the importers were incurring expenditure because of warehousing, any further withholding of the imported goods was not justified. Thus, the High Court issued directions to the Respondents to forthwith release the goods of the importers covered by the bills of entry mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.01.2021 and, while issuing notice, this Court stayed the operation of the order impugned. Later on, these matters were taken up for hearing in priority looking to the nature of controversy and the goods involved. During the course of hearing, on 18.03.2021, this Court found no reason for continuation of contempt proceedings in the High Court and closed the same. On 18.03.2021, yet another observation was made by this Court with reference to the submission of learned ASG appearing for the Appellants, that it was open to the private Respondents to opt for re-export of perishable imported goods lying in the customs warehouse to outside India. 8. The outline foregoing makes it clear that in the case of Agricas (supra), while deciding on the validity of the notifications and the trade notice, this Court did not accept that the imports in question, as made on the basis or under the cover of the interim orders passed by the High Courts, could be regarded as bona fide; but, in the given circumstances and the issues raised, this Court left those goods to be dealt with under the Customs Act. Now, dealing of the goods in question under the Customs Act has given rise to this litigation. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confiscation. The contesting Respondents 11. The two importers, in whose relation the impugned orders have been passed by the authorities concerned and the High Court are the contesting Respondents of these appeals. Their relevant particulars are as under: 11.1. M/s. Raj Grow Impex LLP This importer is said to be a partnership firm having its registered office at Jaipur in the State of Rajasthan. This firm had filed ten bills of entry dated 01.11.2019 for clearance of 24,815 MTs of yellow peas, said to have been imported under the cover of interim order dated 20.07.2019, as passed by the Rajasthan High Court, Bench at Jaipur in WP No. 11974 of 2019. Its efforts to get the goods released with payment of fine led to the order-in-original dated 28.08.2020. This importer had obtained OOC for three bills of entry and got released 7,500 MTs of the goods in question but the remaining were not released. This importer had filed WP (L) No. 3502 of 2020 before the High Court of Judicature at Bombay seeking mandamus which was decided by the common order dated 15.10.2020. This importer has also filed WP (ST) No. 24 of 2021 questioning the order-in-appeal dated 24.12.2020 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 92 of 2019; and out of the quantity imported, 14,366 MTs of goods got released but not the remaining. It is stated by this importer that pursuant to the show cause notice dated 05.10.2020, the Commissioner of Customs, Nhava Sheva found the goods to be prohibited and liable to confiscation whereafter it had filed a writ petition bearing No. 525 of 2021 before the High Court of Judicature at Bombay against the non-clearance of the goods but in the meantime, the main issue has been taken up by this Court in these appeals. Relevant factual aspects and background 13. Having taken note of the salient features of the case, the relevant particulars of the parties before us with their respective interests, we may now enter into the relevant factual aspects and background in necessary details but while avoiding the facts which may not have bearing on determination of the real issues involved. 14. The relevant background aspects of the matter are that the Central Government had issued notifications dated 05.08.2017 and 21.08.2017, revising the policy for import of urad/moong and pigeon peas/toor dal from free to restricted with a stipulation as to annual quota and requirement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March, 2019, the Central Government, in exercise of its power Under Section 3 of the FTDR Act read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy 2015-2020, amended the import policy conditions relating to various items of Chapter 7 of the Indian Trade Classifications (Harmonized System) 2017, Schedule I by way of S.O. Nos. 1478(E) :, 1479(E) :, 1480(E) : and 1481(E) dated 29.03.2019. These were followed by the trade notice dated 16.04.2019 by the DGFT. These notifications are at the core of controversy involved in these matters and hence, it would be just and appropriate to reproduce the same as under: S.O. 1478(E) :.-In exercise of powers conferred by Section 3 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central Government hereby notifies the Import Policy of items of Chapter 7 of the Indian Trade Classification (Harmonized System), 2017, Schedule-1 (Import Policy), as under- Exim Code Item Description Existing Policy condition Revised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn Trade (Development and Regulation) Act, 1992 (22 of 1992), read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central Government hereby notifies the Import Policy of items of Chapter 7 of the Indian Trade Classification (Harmonized System), 2017, Schedule-1 (Import Policy), as under- Exim Code Item Description Existing Policy condition Revised Policy condition 0713 31 90 0713 90 10 0713 90 90 Beans of the SPP Vigna Radiata (L.) Wilezek Split Other Restricted. Import of Urad shall be subject to an annual (fiscal year) quota of 1.5 lakh MT as per procedure to be notified by Directorate General of Foreign Trade: - Provided that this restriction shall not apply to Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge the said notifications dated 29.03.2019 and the trade notice dated 16.04.2019, about 90 writ petitions were filed before the Rajasthan High Court, Bench at Jaipur. Various akin writ petitions were filed before the High Courts of Delhi, Punjab and Haryana, Andhra Pradesh, Bombay and Calcutta. In several such writ petitions, interim orders were passed, permitting the importers to import the said peas/pulses, notwithstanding the fact that they had not been issued the import licences, as also the fact that the total imports with such interim orders would exceed the maximum quantity fixed by way of the impugned notifications. 17. In the given set of circumstances, Union of India approached this Court with several transfer petitions. Having regard to the circumstances and submissions sought to be made, such writ petitions concerning the notifications in question were withdrawn to this Court and were ultimately dismissed by the said judgment dated 26.08.2020, in the case of Agricas (supra). Judgment dated 26.08.2020 of this Court in Agricas 18. In the case of Agricas (supra), a variety of issues, essentially relating to the validity of notifications and the corresponding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake panic disposal at much lower prices. In the further affidavit filed on 1st July 2020, the Union of India has stated that they had not issued any quota for Peas, Yellow Peas etc. as inspite of restricted quota of 1 lakh and 1.5 lakh MTs for Peas in the Financial Years 2018-19 and 2019-20, due to interim orders passed by the various High Courts, the actual import was 8.51 lakh MTs and 6.67 lakh MTs during the Financial Years 2018-19 and 2019-20, respectively. Consequently, it has been decided not to import Yellow Peas in the current Financial Year 2020-21. In the affidavit filed on 6th July 2020, with reference to Section 9A of the FTDR Act, the Union of India has stated that the said Section is attracted only when the goods are imported into India in increased quantity and under such conditions as to cause or threaten to cause serious injury to domestic industry. Section 9A is enacted as a safeguard mechanism in terms of Article XIX of the GATT-1994 and Article II of the WTO Agreement on Safeguards vide the Amendment Act, 2010. The notifications under challenge have been issued within the express terms of Section 3 of the FTDR Act which permits the Central Government to impose r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as the number of licences issued concerning the subject goods could be numerable (as per the Union of India 2248, 1016 and 2915 licences were issued in 2019-20 for import of Tur, Moong and Urad dals against restricted quota of 4, 1.5 and 4 lakh MT, respectively). If each licence holder is allowed to import 1/1.5 lakh MT of Peas, the total import would well exceed the total annual consumption after we account for the production within India. In our opinion, the plea and interpretation of the importers if accepted will not only be contrary to the express language of the notification but would frustrate the intent and object of restricting the imports of the stated goods by prescribing a quota. We decline and would not accept this farfetched and somewhat drivel interpretation of simple and straight forward words. 18.3. After dealing with the interpretation of Section 9A of the FTDR Act and its co-relation with Article XI and Article XIX of GATT-1994 as also Section 3 of the FTDR Act, this Court held the notifications in question to be valid, for having been issued in accordance with the powers conferred on the Central Government in terms of Sub-section (2) of Section 3 of the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65. Learned Counsel for some of the importers had placed reliance on Raj Prakash Chemical v. Union of India, which judgment, in our opinion, has no application. In Raj Prakash Chemical (supra), the Petitioner had acted under a bona fide belief in view of judgments and orders of High Courts and the interpretation placed by the authorities. In this background, observations were made to giving benefit to the importers, despite the contrary legal interpretation. In the instant case, the importers rely upon the interim orders passed by the High Court's whereas on the date when they filed the Writ Petitions and had obtained interim orders, the Madras High Court had dismissed the Writ Petition upholding the notification. Similarly, the High Court of adjudicature at Bombay, High Court of Gujarat and the High Court of Madhya Pradesh had dismissed the Writ Petitions filed before them and upheld the notifications and the trade notices. Notwithstanding the dismissals, the importers took their chance, obviously for personal gains and profits. They would accordingly face the consequences in law. In these circumstances, the importers it cannot be said had bona fide belief in the right pleaded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable notifications and trade notice, would be so dealt with under the provisions of the Customs Act. However, what has happened after the aforesaid decision of this Court dated 26.08.2020 in Agricas has given rise to the present round of litigation. Orders-in-original dated 28.08.2020: The Adjudicating Authority allows release of goods on payment of redemption fine 21. As noticed, within no time after the decision of this Court dated 26.08.2020 in Agricas (supra), the private Respondents of these appeals, M/s. Raj Grow Impex LLP and M/s. Harihar Collections, who had made certain imports of the goods covered by the said notifications but their imported goods had not been released, took up the proceedings in the manner that the eventuality of absolute confiscation could be obviated and they could get the goods released by payment of fine. In this regard, they addressed respective communications on 26.08.2020, requesting for waiver of show cause notices Under Section 124 of the Customs Act and for urgent personal hearing. The Adjudicating Authority took up their cases in priority and, by his almost identical orders-in-original dated 28.08.2020, while ordering confiscation U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods became prohibited Under Section 11 of the Customs Act, 1962 read with Section 3 of the FOREIGN TRADE (DEVELOPMENT AND REGULATION) ACT, 1992. Hence, I hold that the goods are liable for confiscation Under Section 111(d) for the Customs Act, 1962. 10. For the above acts of omission and commission which render the impugned goods liable for confiscation Under Section 111(d) of the Customs Act, 1962, I hold that the importer is liable for penalty Under Section 112(a)(i) of the Customs Act, 1962. 22.3. However, after having held that the goods were liable to confiscation and the importer was liable for penalty, the Adjudicating Authority proceeded to determine the quantum of redemption fine and penalty to be levied on the importer. In this regard, the Adjudicating Authority took into account the alleged margin of profit of the importer, market price of the goods, and the expenditure incurred on storage and transportation etc. The Adjudicating Authority also took into account various other factors for which the quality of goods, being perishable in nature, had deteriorated, like poor condition of warehouses, excessive rainfall, humidity, exposure and pest attacks. It was, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of M/s. Raj Grow Impex, the Adjudicating Authority held that the goods in question became prohibited goods Under Section 11 of the Customs Act read with Section 3 of the FTDR Act; and hence, were liable to confiscation Under Section 111(d) of the Customs Act; and the importer was also liable for penalty Under Section 112(a)(i) of the Customs Act. Again, on similar lines, the Adjudicating Authority proceeded to determine the quantum of redemption fine and penalty to be levied on the importer; and, on similar considerations as above, proceeded to impose fine and penalty while calculating the margin of profit @ Re. 1 per Kg and concluded on the matter with the following order: 13. In view of the above discussions and findings, I pass the following order: Order i. I confiscate the impugned goods Under Section 111(d) of the Customs act, 1962. Whereas I give an option to the importer to redeem the impugned goods on payment of the redemption fine of ₹ 1.5 crores (Rupees One Crores Fifty Lakhs Only) in lieu of confiscation Under Section 125(1) of the Customs Act, 1962. ii. I, also impose a penalty of ₹ 2.35 crores (Rupees Two Crores Thirty Five Lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs received the communication from Mumbai Port Trust authorities that the cargo stored in the port trust premises will not be released on account of the directions received from the customs authorities. Thereafter, they received one more letter from the Mumbai Port Trust on 11.09.2020 stating that the goods could be cleared subject to fulfilment of the Customs and Port Trust formalities. However, despite all their efforts, the importers could not secure the desired release of goods. 25. Being aggrieved by the said communications and denial of release of the goods, the Respondent-importers approached the High Court of Judicature at Bombay on 15.09.2020, seeking mandamus for clearance of the goods imported by them while also questioning the communications denying them the release of the goods in question. The writ petitions so filed by the importers, being Writ Petition (L) No. 3502 of 2020 (M/s. Raj Grow Impex LLP v. Union of India and Ors.) and Writ Petition (L) No. 3503 of 2020 (M/s. Harihar Collections v. Union of India and Ors.), were decided by the impugned common order dated 15.10.2020. We shall be dilating on the relevant features of the order dated 15.10.2020 a little lat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 520872 and 5521191 on payment of Redemption Fine and Penalty; (e) for ad-interim reliefs in terms of prayer Clause (d) above; (f) for costs of this Petition and the Orders made thereon, and (g) for such further and other reliefs as this Hon'ble Court may deem fit in the facts and circumstance of the case. In Writ Petition (L) No. 3503 of 2020 by M/s. Harihar Collections 33. The Petitioner therefore prays that: (a) This Hon'ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction for calling for the records of the present case and after going through the legality and validity thereof be pleased to quash and set aside the Directions/Letter issued by Respondent No. 5 and 6 on 02.09.2020 ( Exhibit K L ); (b) This Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ or order or direction Under Article 226 of the Constitution of India ordering and directing the Respondents and in particular Respondent No. 7 and Respondent No. 4 itself, its officers, subordinates, servants and agents to clear th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confiscation. The Commissioner observed as follows: In the present case, the oral submissions as recorded in the subject OIO do not have any mention of grounds of confiscation being communicated to the importer and their submissions regarding the same, The recordings of personal hearing are largely with respect to importers contention that as per the Hon'ble Supreme Court order Customs Authorities to deal with the goods imported under provisions of Customs Act, and with regards to deterioration in the quality of goods. No detailed Show cause was issued incorporating all relevant ground of prohibitions in the matter viz. suspension of IEC etc. Therefore, the subject order of ADC suffers from legal infirmities. b. Non-addressal of the issue of suspension of IEC of the Importer In regard to this aspect, the Commissioner referred to the fact that there was a question-mark about the very existence of the firm in question; and also referred to the statutory appeals concerning suspension or termination of IEC. The Commissioner observed as follows: In the subject OIO issued by the Adjudicating Authority, mention has been made in brief facts regarding receipt of complain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Adjudicating Authority to take into account the relevant considerations while observing as under: 19. The goods became prohibited Under Section 11 of the Customs Act, 1962 read with Section 3 of Foreign Trade (Development and Regulation) Act, 1992. Thus, the option of re-export of the said goods to the original supplier should also have been taken into consideration. It is now settled law that power of discretion by the authority is to be exercised based on well-founded principles and should not be done in a mechanical way. It is the Adjudicating authority's bounden duty to give cogent reasons while exercising discretion as to why goods are being released on redemption fine which he grossly failed to do. He had an obligation to Revenue and the State, as much as he did towards the Appellant while considering the question of redemption. The adjudicating authority did not give reasons as to why absolution confiscation or re-export is not taken into consideration in view of the facts of the case as listed above. (emphasis in bold supplied) e. Apart from the above, the Commissioner also found the shortcomings that the Adjudicating Authority, (i) chose to rely on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the writ petitions were heard on 06.10.2020, a submission was made on behalf of the Respondents that after passing of the said order dated 01.10.2020 by the Commissioner, the writ petitions were rendered infructuous and were also liable to be dismissed for the writ Petitioners having not challenged the order so passed by the Commissioner. It was also pointed out that pursuant to the said order dated 01.10.2020, the appeals had already been filed before the Commissioner (Appeals) against the orders-in-original. Per contra, it was submitted on behalf of the writ Petitioners that the stand so taken was not only unfair but was untenable too. It was submitted that the Respondents of the writ petitions had attempted to materially alter the subject matter of the petitions without taking leave of the Court. This apart, it was also contended that the grounds stated by the Commissioner while directing the Additional Commissioner to apply for appeal were totally frivolous; and all the grounds given in the order dated 01.10.2020 were also countered. It was also submitted that the orders-in-original dated 28.08.2020, issued on 03.09.2020, were holding the field and had neither been set aside n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Petitioner should be relegated to the appellate forum to contest the subsequent order. As pointed out above, this amounts to interfering with the administration of justice and is thus not at all acceptable. A view may be taken that such an order should be ignored as it is contumacious. 31. Having said that, the High Court proceeded to examine the scope and purport of the powers Under Section 129D(2) of the Customs Act and held that those powers were in the very narrow compass, being essentially of revision and not of review. The High Court also observed that the Commissioner had three months' time to pass the said order which was further extendable by thirty days; and yet, 'he chose to pass the order most hastily in the midst of the court proceeding keeping the court completely in the dark'. Proceeding further, the High Court summarised the reasons given by the Commissioner of Customs for taking the view against the orders-in-original in the following terms: 29........ After narrating the facts of the case and the order-in-original passed by the adjudicating authority, Commissioner of Customs took the view that the said order is not legal and proper for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order-in-original. 32.3. The third, fourth and sixth grounds aforesaid were examined together and the High Court took the view that taking exception to the order-in-original on the basis of these grounds appeared to be questionable. The High Court, inter alia, observed as under: 34.3. The power under Sub-section (1) of Section 125 regarding giving option to the owner or person concerned to pay fine in lieu of confiscation is discretionary in respect of goods the importation or exportation whereof is prohibited but in respect of other goods it is mandatory. Therefore, such a power is available to the adjudicating authority and he has exercised that power. That apart, when fine is imposed in lieu of confiscation, Sub-section (2) makes it abundantly clear that the owner or the person concerned would have to pay in addition to the fine, the customs duty and other charges. Non-mentioning of the duty payable in the order-in- original is therefore immaterial, as payment of the same is statutorily mandated under Sub-section (2) of Section 125. xxx xxx xxx 34.6. In such circumstances, taking exception to the order-in-original on the above grounds appears to be questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fide satisfaction can be arrived at that the order-in-original suffers from illegality or impropriety. Even on that aspect also, we refrain from expressing our final views since it is stated that application has been filed pursuant to the order dated 01.10.2020 which shall now be treated as an appeal, but the manner in which the order has been passed is definitely questionable and the contents of the order dated 01.10.2020 particularly the grounds given as examined prima facie do not make out a case that the order-in-original suffers from such illegality and impropriety that suo-motu revisional power Under Section 129D(2) should be exercised. Prima-facie, on examination of the grounds as above, we cannot say that the order-in-original is unlawful or inappropriate or unjust or that the adjudicating authority acted beyond the bounds of his authority. However, since application has been filed which will now be decided by the Commissioner (Appeals) as an appeal, we only limit our examination to the justification or otherwise of not releasing the goods of the Petitioner on the strength of the order dated 01.10.2020. (emphasis in bold supplied) 34. Thereafter, the High Court re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. 39. Both the writ petitions are accordingly allowed. We thought of imposing cost in this case but we have refrained ourselves from doing so. 35. As noticed, the Appellants had approached this Court against the aforesaid order dated 15.10.2020 on 26.11.2020 by way of SLP(C) Nos. 14633-34 of 2020 but the SLPs did not come up for consideration and, in the meantime, the importer M/s. Raj Grow Impex moved an application before the High Court for modification of the order dated 15.10.2020 and for incorporating the left-over bills of entry, which did not occur in paragraph 38 of the original order dated 15.10.2020. Though it was pointed out before the High Court that SLPs had already been filed in this Court against the order dated 15.10.2020 but it was also an admitted position that until then, no stay had been granted by this Court. Having noticed the submissions, the High Court deemed it just and proper to issue the modification order on 09.12.2020 in the following terms: 10. Having heard learned Counsel for the parties and on due consideration, we modify our judgment and order dated 15th October, 2020 by insertion/addition of the following sentence in paragraph 4.1 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Customs was correct in going ahead with the adjudication despite non issue of show cause notice, cancellation of IEC, etc. (ii) whether the impugned goods is liable for absolute confiscation or redemption Under Section 125(1) of the Act should have been considered or should have been redeemed for the purpose of re-export to the original supplier and (iii) whether Redemption Fine and Penalty imposed is adequate looking into the gravity of the offense. In my discussions below, I will deal with these issues. 38.1. After rejecting the peripheral/technical issues raised by the importer, as regards maintainability of the appeal and his jurisdiction to deal with the same, the Appellate Authority entered into the determination of major issues involved in the matter. It would be relevant to notice that one of the arguments urged before the Appellate Authority in opposition to the appeal was that all the grounds of appeal had been examined by the High Court in its order dated 15.10.2020 and, therefore, the appeal merited rejection. This contention was countered on behalf of the Appellant with the submission that only the implementation of the order dated 28.08.2020 was the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: a. As regards non-issuance of show cause notice, the Appellate Authority observed that the Respondent-importer had expressly waived the right to show cause notice and though the Adjudicating Authority was entitled to proceed with adjudication, the order passed by him ought to be in sync with the law in terms of Sections 111 and 125 of the Customs Act read with the ratio in Agricas (supra). b. As regards non-addressal of the issue of suspension of IEC, the Appellate Authority observed that by an order dated 05/06.12.2019, the IEC of the said importer was suspended and the ASG, Rajasthan by his letter dated 06.12.2019, had informed the Appellant that the firm was nonexistent and some other firm dealing with the aviation business was running its office as tenant for last 10 years. The Appellate Authority observed that as per the directions of this Court in Agricas (supra), the statutory appeal, if any, preferred against suspension or termination of IEC, was to be decided in accordance with law. The Appellate Authority took note of the fact that proceedings having been taken up rather at a brisk pace after the decision of this Court in Agricas (supra) and the material aspects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tfn. imposing a restriction on import quantities while on the other hand the adjudicating authority defeats the objective of constitutionally valid Notifications by allowing the goods to mingle in the Indian markets on payment of a Redemption Fine and Penalty. In the above submissions of the Appellant, they have countered the submissions of the Respondent in detail and on the basis of Case Laws. Section 125 of the Act makes clear distinction between prohibited goods and other goods and obligates release of other goods on payment of Redemption Fine............ f) Hence the law is settled that restricted goods under the Act are deemed to be prohibited goods if the conditions subject to these goods have not been complied with. The Hon'ble Supreme Court in the case of M/s. Agrica's LLP and others has already held that the steps can be initiated as per the Customs Act 1962 and the subject goods should be dealt with under the provision of FT (D R) Act, 1992. Since the DGFT notification dated 29.02.2019 has been issued Under Section 3(2) of FT(D R) Act, 1992, has imposed restriction upon the import of the goods, the subject goods Under Section 3(3) of FT(D R) Act, 1992 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would defeat the very purposes of import restrictions. Based on these findings I observe that the impugned goods merited absolute confiscation. (emphasis in bold supplied) d. The Appellate Authority also found the assessment of margin of profit and quantum of penalty in the order-in-original wanting in the requisite analysis and assessment; and observed as under: h. Further, the Revenue has raised objection in the manner of calculating the quantum of margin of profit and the way the same has been divided between fine and penalty and has contended that the order stands on flimsy grounds and beyond the accepted principles of law. The Revenue explained that how the Redemption Fine and Penalty serves the mutually exclusive purposes i.e. while the Redemption Fine nullifies the margin of profit, the penalty acts as a deterrent. But the manner in which the adjudicating authority has conveniently divided the margin of profit between Redemption Fine and Penalty is questionable and is bad in law. Further, Revenue has also objected on quantum of Redemption Fine and Penalty and pleads that the same is abysmally low. On a plain reading of Para 12 of the order of the adjudicating a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d impose a Penalty of ₹ 5,00,00,000/- (Rupees Five Crores only) on M/s. Raj Grow Impex LLP, 114, First Floor, Jaipur Tower, MI Road, Jaipur, Under Section 112(a)(i) of Customs Act 1962, and any Penalty paid, if any, against the impugned Order-in-Original is ordered to be appropriated towards this new enhanced Penalty. 39. From the submissions made and the material placed on record, it is noticed that a similar order-in-appeal in relation to the other importer M/s. Harihar Collections was also passed by the Appellate Authority on 24.12.202013. On the facts of that case, the Appellate Authority found that the goods covered by the said eight bills of entry had already been cleared and were not available for absolute confiscation. This was also accepted by the Appellate Authority as fait accompli while directing appropriation of the redemption fine paid in this regard but the penalty of ₹ 2.35 crores in that case, as imposed by the Adjudicating Authority, was enhanced to a sum of ₹ 10 crores Under Section 112(a)(i) of the Customs Act. The operative portion of the order-in-appeal concerning the importer M/s. Harihar Collections reads as under: ORDER i. I o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20; and while placing the matter on 27.01.2021, the High Court required the counsel for the Department to state compliance. The relevant part of the order dated 05.01.2021 in the fresh writ petition so filed by the importer M/s. Raj Grow Impex reads as under: 6. Prima facie the above directions of Respondent No. 2 are totally in contravention to the order of this Court. That apart, view taken by Respondent No. 2 that the decision of this Court while directing release of the goods was prima facie is not correct. When the High Court had directed release of the goods forthwith, it is beyond comprehension as to how a lower appellate authority can nullify such direction by ordering absolute confiscation of such goods. It is not only unacceptable but contumacious as well which aspect we may deal with at a later stage. 7. In view of the above, we stay operation of the order dated 24th December, 2020 until further orders. 8. Respondent Nos. 3 and 4 shall comply with the directions of this Court dated 15th October, 2020 and 9th December, 2020. 9. List on 27th January, 2021, on which date Mr. Jetly shall inform the court about compliance of today's order. 41.1. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition, the High Court entertained the same and granted stay but, omitted to consider that the order-in-appeal could have been challenged in regular statutory appeal before CESTAT Under Section 129A of the Customs Act. 44.1.1. As regards the power Under Section 129D of the Customs Act, the learned ASG has submitted that thereunder, the higher authority only performs the function of reviewing on grounds relating to legality or propriety and directs the lower authority to file an application for appeal; and exactly that was done in the orders dated 01.10.2020. 44.2. As regards the question as to whether the subject goods are to be treated as 'restricted' or 'prohibited', the learned ASG has referred to Sub-sections (2) and (3) of Section 3 of the FTDR Act and Sections 2(33) and 11 of the Customs Act and has submitted that the notifications in question, placing a quantitative restriction on the import of certain pulses, which were upheld by this Court by the judgment dated 26.08.2020 in Agricas (supra), had been issued under Sub-section (2) of Section 3 of the FTDR Act; and since the goods imported by the Respondent are covered by the said notification, they are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned ASG has referred to the decision in S.B. International Ltd. and Ors. v. Asstt. Director General of Foreign Trade and Ors. (1996) 2 SCC 439. 44.4. On the question regarding treatment of the subject goods, the learned ASG has made elaborate submissions on the scope of Section 125 of the Customs Act and has contended that thereunder, a clear distinction is made between 'prohibited goods' and 'other goods' inasmuch as in the case of 'other goods', Section 125 obligates release of the same against redemption fine, whereas there is no such compulsion when it comes to the 'prohibited goods'. The Adjudicating Authority under the Customs Act can absolutely confiscate the prohibited goods using its judicial discretion. The learned ASG would argue that both, in terms of provisions of the Customs Act and the decisions rendered, restricted goods under the Customs Act are deemed to be prohibited goods, if the conditions attached to restricted goods are breached, as in the present case. The learned ASG has strongly relied upon the decision of this Court in the case of Garg Woollen Mills (supra) and has contended that while deciding a similar customs matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact situation in the case of Atul Automations (supra), in the present case, this Court had held that excess imports will not be in the interest of the farmers, and the excess imports made in contravention of the notifications but under the cover of the interim orders were not bona fide; and further that such imports were made with the motive to earn profits and gains and therefore, the importers should suffer the consequences. Thus, according to the learned ASG, the judgment in Atul Automations (supra), proceeding on its own facts, will not have a bearing on the facts and circumstances of the present case. 44.7. The learned ASG has also referred to a decision of the Kerala High Court in the case of Shri Amman Dhall Mill v. Commissioner of Customs to submit that the said High Court, as regards similar imports, has upheld the orders for absolute confiscation; and the goods imported by the Respondent deserve the same treatment. 44.8. The learned ASG would, therefore, submit that the fine and penalty imposed by the Commissioner (Appeals) may be upheld; the importers may be allowed to re-export the goods out of India on payment of redemption fine of 5%; and the Appellants may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Counsel would argue that the contentions of the Appellants are very much against the spirit of the said notifications dated 29.03.2019 and the trade notice inasmuch as under the said notifications, the policy conditions qua the goods in question were not revised and they were not placed in the 'prohibited' category. The DGFT's interpretation on its own website has also been referred where, in answer to a query as to 'what is a restricted item', the DGFT stated that all goods, import of which is permitted only with an Authorisation/Permission/License or in accordance with the procedure prescribed in a notification/public notice are 'Restricted' goods. It has, thus, been contended that whenever a licence is required for import of certain goods, the same is a 'restricted' item and not a 'prohibited' one; and that the Appellants are not right in their contentions that the peas were a 'prohibited' item. 45.5. The learned Senior Counsel has elaborated on his submissions with reference to the connotation of the terms 'prohibited' and 'restricted', particularly with reference to Section 2(33) of the Customs Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n fine as deemed fit and proper by this Court but the option of re-export may not be a feasible option at this stage for, it is a time-consuming process with logistical and transportation issues and more particularly, in the present pandemic situation; and the Respondent has already suffered huge losses by way of detention, demurrage, rent, interest, insurance and other related costs. With these submissions, the fervent plea on behalf of this Respondent-importer has been to allow the redemption of remaining goods. 46. The learned Counsel appearing for the other Respondent-importer M/s. Harihar Collections, while arguing in tandem with the aforesaid contentions of the senior counsel, has made yet further submissions against the proposition of absolute confiscation16. 46.1. With reference to Sub-sections (2) and (3) of Section 3 of the FTDR Act and Section 11 of the Customs Act, it is submitted that all goods to which an order under Sub-section (2) of Section 3 applies shall be deemed to be the goods of which import has been 'prohibited' Under Section 11 of the Customs Act but in the present case, no such order under Sub-section (2) prohibiting the subject goods having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory remedy of challenging this enhancement of penalty before the CESTAT; and it is prayed that the opportunity to avail the appropriate remedy may not be curtailed for this importer. In this regard, it has also been submitted that the High Court, in its order dated 15.10.2020, never injuncted the Department from proceeding with their statutory appeal and, following the same thread, the Respondent-importer may also be allowed to exercise its right of appeal before the CESTAT; and, for that matter, any observation made in the present matter may not prejudice such right of appeal. 46.3. It has further been argued that the entire quantity of 38,500 MTs, as imported by this Respondent-importer, was finally allowed to be cleared by the authorities concerned after the order of the Bombay High Court dated 15.10.2020 and hence, when the goods are not available for confiscation, no redemption fine could be imposed. A decision of Bombay High Court in the case of Commissioner of Customs (Import), Mumbai v. Finesse Creation Inc. (2009) 248 ELT 122 has been referred and it has also been pointed out that an SLP against the said decision was dismissed by this Court on 12.05.2010. 46.4. With ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted' goods have the option of being redeemed on payment of market value and do not deserve the treatment of 'prohibited' goods Under Section 125 of the Customs Act. Countering the submissions of the ASG, it has been contended that the definition of restricted or prohibited does not apply to a specific quantity but to a product and accordingly, the entire quantity should be treated as restricted and be released on payment of fine and penalty. 47.1.2. It has further been submitted that even if the goods in question are prohibited, the discretion could be exercised by the Adjudicating Authority Under Section 125 of the Customs Act to allow redemption/release on fine. The decisions in Hargovind Das K. Joshi and Sant Raj (supra) have been referred. Further, it has been submitted with reference to the decision in the case of U.P. State Road Transport Corporation and Anr. v. Mohd. Ismail and Ors. (1991) 3 SCC 239 that the Court cannot direct the statutory authority to exercise the discretion in a particular manner not expressly required by law; and with reference to the decision in Assistant Commissioner (CT) LTU, Kakinada and Ors. v. Glaxo Smith Kline Consumer Health Care ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25 of 2021 before the High Court of Judicature at Bombay against non-clearance of the goods but in the meantime, the main issue has been taken up in these appeals. 47.2.1. Almost identical arguments have been raised on behalf of this importer that the goods in question are not prohibited and, in any case, they could be released upon payment of redemption charges with reference to Section 11(9) of the FTDR Act and/or Section 125 of the Customs Act. Similar grounds of equity have also been urged, as noticed in the case of the other Applicant which need not be repeated. 48. Before proceeding further, we may usefully summarise the principal submissions of the parties. 48.1. To put it in a nutshell, the principal submissions on behalf of the Appellants are: that the High Court has erred in entertaining the writ petitions and the directions by the High Court for release of goods were not compatible with the purpose of adjudication by the Appellate Authority; that the subject goods, being covered by Section 3(2) of the FTDR Act and having been imported without licence as also in excess of the cap of 1.5 lakh MTs, became prohibited goods Under Section 11 of the Customs Act by virt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd looking to the nature of orders involved in the matter, it would be appropriate to examine the validity of the orders so passed by the High Court before dealing with other issues. Legality and validity of the orders passed by the High Court 51. As noticed, the Respondent-importers approached the High Court with the grievance that the goods were not being released despite the orders-in-original dated 28.08.2020 having been passed in their favour; and they having made the payments (in whole in the case of M/s. Harihar Collections and partially in the case of M/s. Raj Grow Impex) and having obtained OOC. During the pendency of matters in the High Court, the Commissioner passed the orders dated 01.10.2020 in exercise of his power Under Section 129D(2) and then, it was suggested before the High Court on behalf of the Department that the writ petitions were rendered infructuous because of the said orders dated 01.10.2020. 52. A close look at the impugned order dated 15.10.2020 makes it clear that the High Court dealt with the issues before it in three major segments: (i) as regards the nature of jurisdiction Under Section 129D(2) of the Customs Act; (ii) as regards the propri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Tribunal for the determination of such points arising out of the decision or order, as may be specified in its order. (2) The Principal Commissioner of Customs or Commissioner of Customs may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority or any officer of customs subordinate to him to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Principal Commissioner of Customs or Commissioner of Customs in his order. (3) Every order under Sub-section (1) or Sub-section (2), as the case may be, shall be made within a period of three months from the date of communication of the decision or order of the adjudicating authority: Provided that the Board may, on sufficient cause being shown, extend the said period by another thirty days. (4) Where in pursuance of an order under Sub-section (1) or Sub-section (2), the adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power Under Section 129D of the Customs Act. In fact, we are unable to comprehend as to what precisely was the outcome of the detailed discussion by the High Court concerning the nature of power Under Section 129D(2) because it had not been the finding that the orders dated 01.10.2020 were suffering from any want of jurisdiction or if the Commissioner, while passing the said orders, transgressed the bounds of his authority. 54. The other aspect commented upon by the High Court had been about the manner and time of passing of the said order when the matter was sub judice in the High Court. 54.1. Coming to the question of propriety in passing of the orders dated 01.10.2020 by the said Commissioner despite being aware of the pendency of the writ petitions in the High Court, in our view, the comments of the High Court, even when not incorrect in general application, do not appear apt and apposite to the facts and in the circumstances of the present case. In other words, though we are at one with the High Court that, ordinarily, when the matter is sub judice in the higher forum and that too before the Constitutional Court, the executive authorities should not attempt to bring abou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal and that if the writ, as prayed for, was to be issued and the goods were to be released, nothing much on merits was to be left for examination by the Appellate Authority; and if, for any reason, the orders-in-original were to be interfered with at a later stage in the appellate forum, irreparable damage would have been done because the goods would have been released for the domestic market. (As noticed, it has indeed happened to a large extent in present cases, with release of a substantial quantity of goods of the Respondent-importers). 54.4. The purpose of our comments foregoing is that even while the High Court was right in questioning the fact that the Commissioner chose to pass the order when the matter was sub judice, the High Court missed out the relevant feature that the importers had preferred the writ petitions essentially to pre-empt any further proceedings by the statutory authority concerned under the Customs Act. In other words, the invocation of writ jurisdiction by the importers was itself questionable. 55. Noticeable it is that the High Court, even after making some scathing comments on the question of propriety against the Commissioner, took up the poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter was left for decision by the Commissioner (Appeals), there was neither any occasion nor any justification for the High Court to pass the order for release of the goods for the simple reason that any order for release of goods was to render the material part of the matter a fait accompli. This, simply, could not have been done. Putting it differently, a little pause after paragraph 36 of the impugned order 15.10.2020 and before the directions in the next paragraph would make it clear that for what had been observed in the said paragraph 36 of the impugned order (as regards leaving of the matter for decision by the Appellate Authority), any direction for release of goods pursuant to the order-in-original could not have been issued. To put it in yet other words, despite making several observations so as to indicate that the review orders dated 01.10.2020 were unjustified and the points stated therein were baseless or untenable, the High Court stopped short of setting aside the orders dated 01.10.2020 and also did not pronounce finally on the validity of the orders-in-original dated 28.08.2020 because the said orders-in-original were the subject matter of appeal. Having rightl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be approved. 60. For what has been observed hereinabove, the other order dated 05.01.2021 passed by the High Court in the second writ petition filed by the importer M/s. Raj Grow Impex also deserves to be disapproved. 60.1. As noticed, in the said order dated 05.01.2021, the High Court even observed that the Appellate Authority wrongly construed that its earlier decision for release of goods has been prima facie; and further questioned as to how a lower Appellate Authority could have nullified its directions for release of goods by ordering confiscation. The construction of its own order dated 15.10.2020, as put by the High Court in its later order dated 05.01.2021, only fortifies the inconsistencies we have indicated hereinabove. This apart, the expression 'prima facie' in regard to the order of the High Court dated 15.10.2020 had not been a creation of the Appellate Authority but had been stated in unequivocal terms, twice over, in paragraph 36 of the order dated 15.10.2020, where the High Court also made it clear that final views were not being expressed because the matter was to be examined in appeal. 60.2. Apart from the above, while entertaining the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ts against licence, a rather preposterous line of arguments was adopted by the importers before this Court that the total quantities specified in each of the notifications was 'per licence' and not for the 'total imports'. Such contentions were rejected by this Court after finding no ambiguity in the notifications and holding clearly that the expression 'total quantity' did not refer to the 'quantity per licence'. This Court further held in no uncertain terms that the impugned notifications were valid for having been issued in accordance with the power conferred in the Central Government in terms of Sub-section (2) of Section 3 of the FTDR Act. Yet further, this Court rejected the submissions that the importers had acted bona fide in importing the goods in question; and the imports, made under the cover of interim orders, were held to be contrary to the notifications and the trade notice issued under the FTDR Act but, were left to be dealt with under the provisions of the Customs Act. 64. In view of the findings and requirements aforesaid and in view of the contentions of the respective parties relating to the treatment of goods imported under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (2), it may, by notification in the Official Gazette, prohibit either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification, the import or export of goods of any specified description. xxx xxx xxx Section 111(d) of the Customs Act, 1962 111. Confiscation of improperly imported goods, etc.--The following goods brought from a place outside India shall be liable to confiscation: xxx xxx xxx (d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force; xxx xxx xxx 65. The categorical findings in the case of Agricas (supra) by this Court, read with the provisions above-quoted, hardly leave anything to doubt that Sub-section (3) of Section 3 of the FTDR Act applies to the goods in question and, for having been imported under the cover of the interim orders but, contrary to the notifications and the trade notice issued under the FTDR Act and without the requisite licence, these goods shall be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods in excess of the cap so provided by the notifications, is not that of restricted goods but is clearly an import of prohibited goods. 67. The applicable principles of law relating to the categorisation of goods as 'prohibited' or 'other than prohibited' have been clearly enunciated by this Court in the decisions referred by the learned ASG. 67.1. In the case of Sheikh Mohd. Omer (supra), a particular mare was found to be not a 'pet animal' and, therefore, its import was found to be violative of the Imports Control Order. It was, however, an admitted position that the import of horses or mares was not prohibited as such. The question was as to whether by making such import, the Appellant contravened Section 111(d) read with Section 125 of the Customs Act. While answering the question, this Court held that any restriction on import or export is to an extent a prohibition; and the expression any prohibition in Section 111(d) of the Customs Act includes restrictions. This Court further underscored that any prohibition means every prohibition; and restriction is also a type of prohibition. This Court, inter alia, said, - 11.... While elaborati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to whether the goods in question are liable to absolute confiscation or could be released on redemption fine. Suffice it to notice for the present purpose that the export attempted in violation of the conditions was held to be taking the goods in the category of 'prohibited' goods. 67.3. In the case of Brooks International (supra), the market value of goods under export was found to be less than the amount of drawback claimed. The question was whether such goods could be confiscated for violation of the provisions of the Customs Act? While considering the import of the definition of prohibited goods in Section 2(33) and of Section 11 of the Customs Act, this Court referred to the following exposition in the case of Om Prakash Bhatia (supra): 10. From the aforesaid definition, it can be stated that: (a) if there is any prohibition of import or export of goods under the Act or any other law for the time being in force, it would be considered to be prohibited goods; and (b) this would not include any such goods in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditions pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of quantity in the manner that the goods were importable only up to a particular extent of quantity and that too against a licence. It was also found therein that the Central Government had permitted the import of used MFDs having utility for at least five years, keeping in mind that they were not being manufactured in the country. 67.4.3. The present case is of an entirely different restriction where import of the referred peas/pulses has been restricted to a particular quantity and could be made only against a licence. The letter and spirit of this restriction, as expounded by this Court earlier, is that, any import beyond the specified quantity is clearly impermissible and is prohibited. This Court has highlighted the adverse impact of excessive quantity of imports of these commodities on the agricultural market economy in the case of Agricas (supra) whereas, it had not been the case in Atul Automations (supra) that the import was otherwise likely to affect the domestic market economy. In contrast to the case of Atul Automations, where the goods were permitted to be imported (albeit with authorisation) for the reason that they were not manufactured in the country, in the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision aforesaid makes it evident that a clear distinction is made between 'prohibited goods' and 'other goods'. As has rightly been pointed out, the latter part of Section 125 obligates the release of confiscated goods (i.e., other than prohibited goods) against redemption fine but, the earlier part of this provision makes no such compulsion as regards the prohibited goods; and it is left to the discretion of the Adjudicating Authority that it may give an option for payment of fine in lieu of confiscation. It is innate in this provision that if the Adjudicating Authority does not choose to give such an option, the result would be of absolute confiscation. The Adjudicating Authority in the present matters had given such an option of payment of fine in lieu of confiscation with imposition of penalty whereas the Appellate Authority has found faults in such exercise of discretion and has ordered absolute confiscation with enhancement of the amount of penalty. This takes us to the principles to be applied for exercise of the discretion so available in the first part of Section 125(1) of the Customs Act. 70. The principles relating to the exercise of discretion by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ought to be made in the exercise of discretion in a given case. The court cannot direct the statutory authority to exercise the discretion in a particular manner not expressly required by law. The court could only command the statutory authority by a writ of mandamus to perform its duty by exercising the discretion according to law. Whether alternative job is to be offered or not is a matter left to the discretion of the competent authority of the Corporation and the Corporation has to exercise the discretion in individual cases. The court cannot command the Corporation to exercise discretion in a particular manner and in favour of a particular person. That would be beyond the jurisdiction of the court. 13. In the instant case, the Corporation has denied itself the discretion to offer an alternative job which the Regulation requires it to exercise in individual cases of retrenchment. ......It may be stated that the statutory discretion cannot be fettered by self-created Rules or policy. Although it is open to an authority to which discretion has been entrusted to lay down the norms or Rules to regulate exercise of discretion it cannot, however, deny itself the discretion whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any debate that discretion has to be exercised judiciously and, for that matter, all the facts and all the relevant surrounding factors as also the implication of exercise of discretion either way have to be properly weighed and a balanced decision is required to be taken. 72. It is true that the statutory authority cannot be directed to exercise its discretion in a particular manner but, as noticed in the present case, the exercise of discretion by the Adjudicating Authority has been questioned on various grounds and the Appellate Authority has, in fact, set aside the orders-in-original whereby the Adjudicating Authority had exercised the discretion to release the goods with redemption fine and penalty. Having found that the goods in question fall in the category of 'prohibited goods' coupled with the relevant background aspects, including the reasons behind issuance of the notifications in question and the findings of this Court in Agricas (supra), the question is as to whether the exercise of discretion by the Adjudicating Authority in these matters, giving option of payment of fine in lieu of confiscation, could be approved? 73. As regards the question at hand, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ol) Order, 1955 read with Section 3(1) of the Import and Export (Control) Act, 1947. In the circumstances he considered it appropriate to direct absolute confiscation of the goods which indicates that he did not consider it a fit case for exercise of his discretion to give an option to pay the redemption fine Under Section 125 of the Act. The Tribunal also felt that since this was a case in which fraud was involved, the order of the Additional Collector directing absolute confiscation of the goods did not call for any interference. We do not find any reason to take a different view. (emphasis in bold supplied) 75. The learned ASG has also referred to the decision in the case of Shri Amman Dhall Mills (supra) where the Kerala High Court has dealt with the imports made in violation of the subsequent notifications concerning the same commodities as are involved in the present case. Therein, on 22.04.2020, the importer applied for issuance of license for import of 200 MTs of green peas but, before actual grant of license to import, filed a bill of entry dated 23.06.2020 for clearance of goods declared as Canadian Green Peas. As per declaration in the bill of entry, the quantit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) and also the fact that the order so passed by the Bombay High Court in the case of M/s. Harihar Collections had been stayed by this Court in the present appeals. Thereafter, the High Court proceeded to disapprove the order passed by the Appellate Tribunal for release of goods, with the following amongst other findings and observations: 25. We hasten to add, that if in every case goods are released on payment of redemption fine, by the primary or appellate Tribunal, then such decisions are unsustainable in law and judicial review. In our considered view, exercise of power and discretion Under Section 125 of Customs Act 1962, are specific and generally governed by the applicable policy, notification etc. Notification dated 18.4.2019 stipulates restriction on import of a quantity of 1.5 lakh MT only; stipulates minimum import price of ₹ 200/- and above CIF per kg and the import is allowed through Calcutta Sea Port only. These are the conditions which the licensee for import of the goods is expected to conform. The primary authority has noted that by keeping in view the stand taken by the Union of India before the Supreme Court in Agricas LLP case; the available stock posi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce in the third part of the submissions because the Collector of Customs had passed the order for absolute confiscation without giving the Appellants an option to redeem the goods on payment of fine. This Court observed that the said Adjudicating Authority, undoubtedly, had the discretion to give an option of payment of fine in lieu of confiscation but omitted to consider such a discretion available with him. In the given circumstances, this Court remitted the matter to the Adjudicating Authority to the limited extent as to whether or not to give an option to the importers to redeem the confiscated goods on payment of fine. In that regard, this Court left it open for the officer concerned to take a decision one way or the other in accordance with law, while observing in the last that the officer concerned will take into consideration all the relevant circumstances including the submission on behalf of the importers that the free import of the goods in question had also been allowed, of whatever worth that was. 76.1. From the decision in Hargovind Das K. Joshi (supra), it is not borne out as to what was the reason for which the goods (zip fasteners) became subject to confiscatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it becomes inevitable that a final decision is taken herein as to how the subject goods are to be dealt with Under Section 125 of the Customs Act. 79. As noticed, the exercise of discretion is a critical and solemn exercise, to be undertaken rationally and cautiously and has to be guided by law; has to be according to the Rules of reason and justice; and has to be based on relevant considerations. The quest has to be to find what is proper. Moreover, an authority acting under the Customs Act, when exercising discretion conferred by Section 125 thereof, has to ensure that such exercise is in furtherance of accomplishment of the purpose underlying conferment of such power. The purpose behind leaving such discretion with the Adjudicating Authority in relation to prohibited goods is, obviously, to ensure that all the pros and cons shall be weighed before taking a final decision for release or absolute confiscation of goods. 80. For what has been observed hereinabove, it is but evident that the orders-in-original dated 28.08.2020 cannot be said to have been passed in a proper exercise of discretion. The Adjudicating Authority did not even pause to consider if the other alterna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be defeated. The discretion in the cases of present nature, involving far-reaching impact on national economy, cannot be exercised only with reference to the hardship suggested by the importers, who had made such improper imports only for personal gains. The imports in question suffer from the vices of breach of law as also lack of bona fide and the only proper exercise of discretion would be of absolute confiscation and ensuring that these tainted goods do not enter Indian markets. Imposition of penalty on such importers; and rather heavier penalty on those who have been able to get some part of goods released is, obviously, warranted. 83. Before closing on this part of discussion, we may also refer to a decision of Bombay High Court in the case of Finesse Creation Inc. (supra), cited on behalf of one of the importers. In that case, the declared value of goods imported by the Assessee in respect of 13 consignments over a period of about three years was rejected and the Commissioner ordered re-assessment of the value of goods; and after re-determination, differential duty was confirmed Under Section 28(2) of the Customs Act with recovery of interest Under Section 28AB thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, no leniency in the name of equity can be claimed by these importers. In fact, any invocation of equity in these matters is even otherwise ruled out in view of specific rejection of the claim of bona fide imports by this Court in Agricas (supra). Once this Court has reached to the conclusion that a particular action is wanting in bona fide, the perpetrator cannot claim any relief in equity in relation to the same action. Absence of bona fide in a claimant and his claim of equity remain incompatible and cannot stand together. 86.2. The overt suggestions on behalf of the interveners that demand and supply of pulses is dynamic and not static in nature have only been noted to be rejected. In our view, meeting with the requirements of demand and supply is essentially a matter for policy decision of the Government. No equity could be claimed with such submissions by the importers. Similarly, if, for whatever reason, any consignment of the subject goods has been released, such release had not been in accord with law and no equity could be claimed on that basis. 86.3. Therefore, all the submissions seeking relief in equity are required to be, and are, rejected. Praye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of penalty. As noticed, this importer has even attempted to argue before us against redemption fine with the submissions that the goods were not available for confiscation. Neither the redemption fine nor even the enhancement of penalty from ₹ 2.34 crores to ₹ 10 crores could fully set off the damage caused by the actions of this importer. Needless to repeat that with our approval of the order-in-appeal, any attempt for further appeal by this importer shall also remain an exercise in futility. 90. In view of above, we find no reason to allow any prayer for filing appeal against the orders-in-appeal dated 24.12.2020. Incidentally: principles relating to the grant or refusal of interim relief 91. While closing on these matters, we are constrained to observe that the root cause of the present controversy had not been that much in the notifications in question as it had been in the interim orders passed by the High Court of Rajasthan, Bench at Jaipur. It needs hardly any elaboration that only under the cover of such interim orders that the importers ventured into the import transactions which resulted in excessive quantities of peas/pulses than those permitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the sense of granting an injunction to a party who fails to establish his right at the trial (or would fail if there was a trial) or alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial. A fundamental principle is therefore that the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been wrong in the sense I have described. The guidelines for the grant of both kinds of interlocutory injunctions are derived from this principle. (emphasis in bold supplied) 92.1. While referring to various expositions in the said decision, this Court, in the case of Dorab Cawasji Warden v. Coomi Sorab Warden and Ors. (1990) 2 SCC 117 observed as under: 16. The relief of interlocutory mandatory injunctions are thus granted generally to preserve or restore the status quo of the last non-contested status which preceded the pending controversy until the final hearing when full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully taken from the party complaining. But since the granting of such an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antity of the said imported peas/pulses. 94. In fact, the repercussion of the stay orders passed in the earlier years were duly noticed by this Court in Agricas (supra); and unfortunately, more or less same adverse consequences had been hovering over the markets because of the imports made under the cover of the interim orders passed in relation to the notifications dated 29.03.2019. This, in our view, was not likely to happen if the material factors relating to balance of convenience and irreparable injury were taken into account while dealing with the prayers for interim relief in the writ petitions. As noticed, this Court had, in unequivocal terms, declared in Agricas (supra), that the importers cannot be said to be under any bona fide belief in effecting the imports under the cover of interim orders; and they would face the consequences in law. It gets, perforce, reiterated that all this was avoidable if the implications were taken into account before granting any interim relief in these matters. 95. We need not expand the comments in regard to the matters relating to the grant or refusal of interim relief and would close this discussion while reiterating the principles n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities/Courts, wherever their matters relating to the subject goods are pending but, their options of further appeal, only in relation to the quantum of amount payable, including that of penalty, is left open. 99. The Respondent-importers shall pay costs of this litigation to the Appellants, quantified at ₹ 2,00,000/- (Rupees two lakhs) each. 100. All pending applications stand disposed of. Foot Note 1The order dated 15.10.2020 is to be read with the modification order dated 09.12.2020 in I.A. (L) No. 5735 of 2020 in Writ Petition (L) No. 3502 of 2020. 2Hereinafter also referred to as 'the FTDR Act'. 3Hereinafter also referred to as 'the DGFT' for short. 4Since reported as; hereinafter also referred to as the case of 'Agricas'. 5Hereinafter also referred to as 'the Customs Act'. 6Hereinafter also referred to as the 'Adjudicating Authority'. 7'OOC' for short. 8Hereinafter also referred to as 'the Appellate Authority'. 9This introduction of persons/entities is to broadly co-relate the parties with the points to be taken up for determination; and is not intended to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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