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TMI Blog2024 (5) TMI 1008X X X X Extracts X X X X X X X X Extracts X X X X ..... stice. The complainant in this case did not have the authority to initiate the present proceedings against the petitioners in respect of the alleged offences which admittedly took place in a duty free shop at an international airport which is beyond/outside the custom frontiers of India. Accordingly the proceedings in this case, being not in accordance with law and thus an abuse of the process of Court/law, is liable to be quashed. CRR 819 of 2019 is allowed. The proceedings u/s 36 (1) the Legal Metrology Act, 2009 read with Rule 32 (3) of the Legal Metrology (Packaged Commodities) Rules, 2011 pending before the Learned Additional Chief Judicial Magistrate, is hereby quashed in respect of the petitioners herein. - HON BLE JUSTICE SHAMPA DUTT (PAUL) For the Petitioners : Mr. Krishna Raj Thakker, Mr. Anurag Bagaria, Mr. Pawan Kr. Gupta, Ms. Riya Debnath, Mr. D. Santhalia. For the Opposite Parties (State) : Mr. Bibaswan Bhattacharya. JUDGMENT SHAMPA DUTT (PAUL), J.: 1. The present revision has been preferred praying for quashing of the proceeding in Case No. C- 163 of 2016 under Section 36 (1) the Legal Metrology Act, 2009 read with Rule 32 (3) of the Legal Metrology (Packaged Commo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he discharge application filed by the petitioners was dismissed by the trial Court vide order dated 05.11.2018 without recording any reason on the merits of the application and on the ground that the proceedings cannot be dropped at the stage of plea. 6. Hence the revision. 7. It is stated by the petitioners that upon a perusal of the afore- mentioned complaint, it would transpire that the instant case is based on the allegation that the packages sold by the Petitioner No. 1 at the duty free shops situated in the International Airport, contravenes the provisions of Rule 6 (i) (a) and (e), Rule 6 (2), Rule 18 (i) of the Legal Metrology (Packaged Commodities) Rules, 2011 read with Sections 1 and 18 (1) the Legal Metrology Act, 2009. These offences are punishable under Section 36 (i) of the Legal Metrology Act, 2009 read with Rule 32 (3) of the Legal Metrology (Packaged Commodities) Rules, 2011. 8. It is also stated that the Petitioner No. 1 has been granted the necessary approvals by the Foreign Investment Promotion Board to carry on the business of duty free shops all over India. 9. The Petitioner No. 1 operates a Duty-free Shop at the Netaji Subhash Chandra Bose International Airpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said definition, Customs Area is the area of a customs station and it includes any area in which imported goods or export goods are ordinarily kept before clearance by Customs Authorities. d) The products which are brought from foreign suppliers are kept in Custom bonded/special warehouses and they are transferred to duty free shops situated at the said Airport as and when the stock of goods lying at the duty free shops exhaust. The Petitioners submit that this activity is also carried out under the strict supervision of Customs Authorities and the Petitioners have no access to the Products without the leave of the Customs Authority. e) The Petitioner No. 2 does not file the green Bill of Entry for home consumption. Such bill of entry is issued when the goods are to be consumed as it is in India. The Petitioners file the bill of entry for warehousing ( yellow Bill of Entry ). f) The petitioner no. 1 is merely a trader. The packaging of the goods is done by the foreign manufacturers / packers. It is not possible for the petitioner No. 1 to change the packing of any goods. It is submitted that when the Products are kept in the special warehouses, the products are deemed to have no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned in the Packages. 3. Consumer Complaint Address is not mentioned in the packages. 18. It is further stated in the complaint that, such using of Packaged commodities during transaction (selling) contravenes the Provisions of Rule 6(1)(a), Rule 6(1)(e), Rule 6 (2), Rule 18 (1) of the Legal Metrology (Packaged Commodities) Rules 2011 read with Section (1) and Section 18 (1) of the Legal Metrology Act, 2009. 19. By way of a supplementary affidavit , the petitioner has filed documents, being:- a) A copy of license no. 34/2015 dated 26.02.2015 valid till 11.03.2016 for the private Bonded warehouse. b) Bill of entry for warehousing showing storage of Cigarettes at Cochin Special Economic Zone. c) The supplier name and address is given as: BOMMIDALA ENTERPRISES PVT. LTD. PLOT NO. 17, FIRST FLOOR, UNIT III, COCHIN SPECIAL ZONE KAKKANAD COCHIN 683037, KERALA INDIA. 20. The State/Opposite party has filed an Affidavit in opposition stating therein that: a) The Petitioner No. 1 herein has a warehouse for the purpose of stocking imported items, duly licensed as per the provisions of Section 58 of the Customs Act, 1962. b) That as per Section 2 (n) (ii) of the Legal Metrology Act, 2009 (here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the ambit of the said Act and its corresponding Rules, which as per Section 1 of the said Act is applicable to the whole of India; moreover, if the present Petitioners are allowed to carry on their usual trade and business with the international passengers, that too in an unfettered manner, in gross violation of the various statutory provisions, as per their free will and wishes, the same will most definitely amount to a mockery of the various statutory provisions, thereby resulting in being detrimental and damaging to the overall goodwill of India as a nation. f) That Section 2 (11) of the Customs Act, 1962, defines a Customs Area to mean the area of a custom station or a warehouse, including any area in which imported goods or exported goods are ordinarily kept before clearance by the Customs Authorities and hence, contrary to the inaccurate and ambiguous interpretation as advanced on behalf of the present Petitioners, it does not routinely include Duty Free Shops. g) That although in order to evade its accountability, the Petitioner No. 1 herein has described itself as merely a trader , yet Section 18 (1) of the said Act categorically imposes a liability upon every person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India and the same when sold in Duty Free Shops, the same are also deemed to be outside the Customs Frontier of India is absolutely vague and elusive in nature and not only contradicts the provisions of the said Act, but also that of the Customs Act, 1962. j) That as per the claims of the present Petitioners, the goods which are kept in the Retail Shop of Petitioner No. 1 herein and comes from the private bonded warehouse of the Petitioner No. 1 herein, as declared by the Customs Authorities, are imported and are meant for supply to the Duty Free Retail Shops for the purpose of sale to the ultimate consumer in the security hold area of International departure. Although the present Petitioners had tried their level best to describe their business transactions as a Separate types of transaction and the goods sold by Petitioner No. 1 herein as separate type of goods , yet the term transaction has been defined in unambiguous terms in Section 2 (u) of the said Act, to mean : (i) any contract, whether for sale, purchase, exchange or any other purpose, or (ii) any assessment of royalty, toll, duty or other dues, or (iii) the assessment of any work done, wages due or services rendered, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S operator shall comply with the provisions of allied Acts and Rules, such as FSSAI. PQ, AQ, LM rules, packaged commodities rules etc, as amended time to time as applicable. (ii) The owner or the authorized representative of Duty Free Shop shall make an application is writing to the Assistant/Deputy Commissioner of Customs, Airport, stating therein his intention to procure indigenous goods. The Assistant/Deputy Commissioner of Customs shall grant the permission after causing such enquiries as he may deem fit. The DFS operator should keep separate accounts for such items. They also required to comply with the GST Rules and Regulations wherever applicable. 25. From the materials on record it is evident that:- i) The petitioners operate two duty free shops pursuant to approval granted by the Government of India, Ministry of Finance, Department of Economy Affairs, FIDD Unit dated 29th August, 2006 and the Special License for Private Bonded Warehouse under Section 58A of the Customs Act, 1962 granted by the Commissioner of Customs, Kolkata, read with the Special Warehouse Licensing Regulations, 2016. ii) The duty free shops of the petitioners are thus deemed to be outside the territory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of SECTIONS 47 and 68 of the Customs Act, 1962 take out the imported warehoused goods to their Duty Free Shops and as a Retail Dealer (Retailer), sell the same to the International Passengers, without complying with the formalities, as prescribed under the different provisions of the Legal Metrology (Packaged Commodities) Rules, 2011 made under the Legal Metrology Act, 2009. x) The Complainant herein is the State represented by the Legal Metrology Officer, Unit No. 26B, Government of West Bengal. xi) Section 1(2) of the Legal Metrology Act, 2009 states that the Act extends to the whole of India. xii) The Supreme Court in Hotel Ashoka (Indian Tour. Dev. Cor. Ltd.) vs Assistant Commissioner of Commercial Taxes and Ors., in Civil Appeal Nos. 2560 and 10404 - 10412 of 2010, decided on 03.02.2012 , has held as follows:- Held, before the goods were imported in the country, they had been sold at the duty free shops of the Appellant. It was very clear that no tax on the sale or purchase of goods can be imposed by any State when the transaction of sale or purchase takes place in the course of import of goods into or export of the goods out of the Territory of India. That the goods sold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of sub- section (2), an appeal shall lie, (a) from every decision or order under sections 15 to 20, section 22, section 25, sections 27 to 39, section 41 or any rule made under sub-section (3) of section 52 by the legal metrology officer appointed under section 13, to the Director; (b) from every decision or order made by the Director of Legal Metrology under sections 15 to 20, section 22, section 25, sections 27 to 39, section 41 or any rule made under sub-section (3) of section 52, to the Central Government or any officer specially authorised in this behalf by that Government; (c) from every decision given by the Controller of Legal Metrology under delegated powers of Director Legal Metrology to the Central Government; (d) from every decision given or order made under sections 15 to 18, sections 23 to 25, sections 27 to 37, sections 45 to 47 or any rule made under sub-section (3) of section 52 by any legal metrology officer appointed under section 14, to the Controller; and (e) from every decision given or order made by the Controller under sections 15 to 18, sections 23 to 25, sections 27 to 37, section 45 to 47 or any rule made under sub-section (3) of section 52 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or. Ltd.) vs Assistant Commissioner of Commercial Taxes and Ors. (Supra) and considering that 9 (nine) long years have passed, the present revision is being disposed of on merit without directing the petitioners to move the statutory appellate authority, only in the interest of justice. 31. In Hotel Ashoka (Indian Tour. Dev. Cor. Ltd.) vs Assistant Commissioner of Commercial Taxes and Ors. (Supra), the Supreme Court further held:- 30. They again submitted that `in the course of import' means `the transaction ought to have taken place beyond the territories of India and not within the geographical territory of India'. We do not agree with the said submission. When any transaction takes place outside the customs frontiers of India, the transaction would be said to have taken place outside India. Though the transaction might take place within India but technically, looking to the provisions of Section 2 (11) of the Customs Act and Article 286 of the Constitution, the said transaction would be said to have taken place outside India. In other words, it cannot be said that the goods are imported into the territory of India till the goods or the documents of title to the goods are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35. CRR 819 of 2019 is allowed. 36. The proceedings in Case No. C- 163 of 2016 under Section 36 (1) the Legal Metrology Act, 2009 read with Rule 32 (3) of the Legal Metrology (Packaged Commodities) Rules, 2011 pending before the Learned Additional Chief Judicial Magistrate, Barrackpore, North 24 Parganas, West Bengal, is hereby quashed in respect of the petitioners herein. 37. Though the proceedings in this case has been quashed, on the ground of lack of jurisdiction/authority on the part of the complainant, the offences alleged in the present case are of a very serious nature having an adverse effect on the consumers. The lack of details as required (para 17 in this judgment) is mandatory for the safety of the consumers/passengers. 38. Such goods without label, M.R.P. etc. being sold in duty free shops and sold to international passengers also raises the question of safety of the passengers/customers. 39. As per Section 2 (11) of the Act of 1962, all duty free shops in India are in customs area, which includes a warehouse and customs station area. 40. The activities in such shops, warehouse and customs station are carried out under supervision of custom authorities, being the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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