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TMI Blog2022 (3) TMI 952X X X X Extracts X X X X X X X X Extracts X X X X ..... RAL DIRECTORATE OF REVENUE INTELLIGENCE, THE COMMISSIONER OF CUSTOMS (IMPORT) , THE COMMISSIONER OF CUSTOMS (AIR) [ 2016 (8) TMI 530 - MADRAS HIGH COURT] and MALA PETROCHEMICALS POLYMERS VERSUS THE ADDITIONAL DIRECTOR GENERAL, DIRECTORATE OF REVENUE INTELLIGENCE ANR. [ 2017 (5) TMI 1234 - DELHI HIGH COURT] , it is found that both Hon ble Madras High Court and Hon ble Delhi High Court have cautioned that the discretion vested in terms of the Section 110A needs to be tested against the test of relevance and reasonableness. In the communication dated 12.11.2021, in para 2, ADG observes that some of the seized goods in the same proceedings for the same violations have been disposed of by the jurisdictional officers even prior to adjudication, and in para 3.4 observes that these goods would pose threat to safety and security of the power industry within the country. He also ignores the fact that Show Cause Notice dated 20.08.2019, which proposes the confiscation of these good under Section 111(d), (l) (m) of Customs Act, 1962, also demand the differential duty in respect of the past clearance of 213 consignments of the same goods. The order/ communication dated 12.11.2021 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds and also bears the standard marks . Therefore, the following statutory conditions are required to be complied with to allow release of imported CRGO sheets: (i) Import of such item shall be permitted only from manufacturer/ exporters who have obtained BIS license for use of standard marks; (ii) The product meets the prescribed quality parameters/technical requirements of the relevant Indian Standards; and (iii) It bears the standard marks. 3.1. From the investigation, it is observed that seized goods for which provisional release has been sought, were imported from overseas suppliers such as M/s. CPT gmbh-Germany, M/s. Recon Metals gmbh- Germany, M/s. Miko Trading gmbh-Germany, M/s. Partners Metals NVBelgium and M/s. Norex International AB-Sweden, which were not manufacturers/exporters who have obtained BIS licence for use of standard marks and to conceal this fact, the importer has allegedly submitted fake/MTCs to Customs as referred in para 23 of the SCN dated 20.08.2019 at the time of clearance of the goods. This fact is further strengthened vide letter dated 02.01.2017 of one of the overseas suppliers M/s Recon Metals GMBH, which indicated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by you for provisional release of the said seized goods is not acceded to. 5. As regards to the request of the Certified copies of original Test Reports, the same are enclosed herewith. With regard to return of original title documents in respect of the seized goods, return of CCTV equipment and other electronic devices and copies of RUDs, please refer to the letter dated 04.10.2021 of the DRI, MZU addressed to you (copy enclosed). 2.0 Appellants had approached the concerned authorities for the provisional release of the seized goods and the same has been disposed of by the Additional Director General (Adjudication) DRI Mumbai by the above communication. From the perusal of the above communication it is quite evident that while disposing of the request made by the appellants, learned ADG, have not even given the opportunity of hearing to the appellants. Thus prima facie this order, suffer from violation of the principle of natural justice. 3.0 We have heard Shri Anil Balani, Advocate for the appellant and Shri Manoj Kumar, Deputy Commissioner, Authorized Representative for the Revenue. 4.0 From the above communication it is evident that adjudicating ADG has reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the case. While securing the same, the competent authority shall take into account the nature of the seized goods, the duty and charges payable on the said goods, their market price and the estimated margin of profit; iii. amount of penalties that may be levied under the Customs Act, 1962, as applicable, at the time of adjudication of the case. 2.3. Depending on the specific nature of a case, the competent authority may, for reasons to be recorded in writing, increase or decrease the amount of security deposit as indicated above. 3. In this context, attention is invited to the Judgment dated 28.07.2016 of the Hon'ble Madras High Court in Writ Appeal No. 377 of 2016 in the case of Malabar Diamond Gallery Pvt. Ltd. vs Additional Director General, DRI, Chennai Ors. wherein the Hon'ble Court has given sufficient discretion to the adjudicating authority to deny provisional release of goods in any case where the goods are smuggled or import is treated as illegal and in violation of the statutory provisions. In terms of the said Judgment, by specifying the relevance and reason, the adjudicating authority may deny provisional release of any goods which are liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontain an undertaking that the importer shall pay the duty, fine and/or penalty as may be adjudged by the Adjudicating Authority, subject to appellate provisions under the Act. Further, where security is furnished by way of Bank Guarantee, the Bank Guarantee should contain a clause binding the issuing bank to keep it renewed and valid till final adjudication of the case, or in the event of non renewal of Bank Guarantee as above, the guaranteed amount be credited to the Government account by the bank on its own. 6. The issue of provisional release of export goods has been dealt with in detail in Board's Circular Nos. 33/2005 dated 02.08.2005, 01/2011 dated 04.01.2011 and 30/2013 dated 05.08.2013 and the same shall continue to be followed. 7. The Chief Commissioners/Director Generals are requested to circulate the present guidelines to all the formations under their charge. Difficulties, if any, in implementation of the aforesaid guidelines may be brought to the notice of the Board. (Rohit Anand) Under Secretary to the Government of India Explanation: For the purpose of this Circular, (i) 'Estimated Value' means an estimate of the value of the sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 110A of the Act, on the presumption that such rights are likely to be granted in future, under Section 125 of the Act, by the competent authority, then we would be exceeding in our jurisdiction. At the stage, when provisional release is either ordered or denied, discretion exercised by the authority, is administrative in nature. 92. Objective satisfaction, at the stage of provisional release, casts a duty on the authority, to consider, as to whether, there are prohibitions/restrictions in the Customs Act, 1962, or any other law for the time being in force and whether he is bound to exercise his discretion, satisfying principles of fairness, reasonableness and whether, it is in accordance with the objects sought to be achieved. At the time of provisional release, it is also to be seen as to whether subjective satisfaction is based on valid materials, and not on whims and fancies of the authority. 93. Keeping in mind, the objects and purpose for which, Customs Act, 1962, is enacted, dealing with prohibition/restriction, this Court is of the considered view that the competent authority, has to arrive at a satisfaction, as to whether, goods seized and liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... draw such a distinction and treat all types of wrongful imports on an equal footing might result in miscarriage of justice. That is perhaps why Section 110A has been worded in the way it has, leaving some margin to the Customs in the exercise of their discretion subject, of course, to the recognised legal limits. 7.0 Thus we find that in both the decisions which are backbone of the Board Circular, we find that both Hon ble Madras High Court and Hon ble Delhi High Court have cautioned that the discretion vested in terms of the Section 110A needs to be tested against the test of relevance and reasonableness. In the communication dated 12.11.2021, in para 2, ADG observes that some of the seized goods in the same proceedings for the same violations have been disposed of by the jurisdictional officers even prior to adjudication, and in para 3.4 observes that these goods would pose threat to safety and security of the power industry within the country. He also ignores the fact that Show Cause Notice dated 20.08.2019, which proposes the confiscation of these good under Section 111(d), (l) (m) of Customs Act, 1962, also demand the differential duty in respect of the past clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of confiscation, could be approved? 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 28-8-2020 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 alternative of absolute confiscation was available to it in its discretion as per the first part of Section 125(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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