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TMI Blog1992 (7) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... . The petitions fall into two broad categories or groups: Category 1 - Those cases where goods were imported and were sent for being warehoused outside Bombay directly from the Bombay Port. Category 2 - Those cases in which goods which were warehoused in a warehouse at Bombay were thereafter transferred to a warehouse outside Bombay. In each of these categories there are two sub-groups. Sub-group A consists of those petitions which have been filed prior to the coming into Operation of the Public Notice of 15th January 1992. These petitions therefore challenge only the Public Notice of llth June 1990. Therefore the petitions which are listed in Categories 1A and 2A are petitions which challenge only the Public Notice of llth June 1990. Sub-group B consists of those petitions in which either both the Public Notices of llth June 1990 and 15th January 1992 are challenged or where only the Public Notice of 15th January 1992 is challenged. Petitions in Categories 1B and 2B are such petitions. 4. The Public Notice of llth June 1990 by itself is no longer in operation. It has been substantially modified by the Public Notice of 15th January 1992. The petitions falling in Categorie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . These are non-consumable stores; goods intended for supply to a foreign diplomatic mission; goods intended for use in any manufacturing process or other operations in accordance with the provisions of Section 65, goods intended for use in any hundred per cent export-oriented undertaking and goods which the Central Government may, if it is satisfied that it is necessary or expedients to do by notification in the Official Gazette, specifyfor the purposes. ' 7. In respect of all other goods Section 59A {which was inserted with effect from 23-12-1991 by Customs (Amendment) Act, 1991] provides that the importer of any dutible goods which have been entered for warehousing shall deposit fifty per cent of the assessed duty and execute a bond binding himself in a sum equal to twice the amount of the balance of such assessed duty and interest leviable on such balance. He is also required to comply with other conditions laid down in Section 59A. Sub-section (3) of Section 59A provides that a bond executed by an importer in respect of any goods shall continue in force notwithstanding the transfer of the goods to any other person or the removal of goods to another warehouse. As a result of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equire the person requesting removal to execute a bond in a sum equal to the amount of import duty leviable on such goods and in such form and manner as the proper officer deems fit." Regulation 4 prescribes the terms of the bond which is required to be executed under Regulation 3. It is as follows: "4. Terms of the bond to be executed. - The terms of the bond shall be that if the person executing the bond produces to the proper officer, within three months or within such extended period as such officer may allow, a certificate issued by the proper officer at the place of destination that the goods have arrived at that place, the bond shall stand discharged; but otherwise an amount equal to the import duty leviable on the goods in respect of which the said certificate is not produced shall stand forfeited." Regulation 5 states as follows: "5. Surety or security to be furnished.-The proper officer may require that the bond shall be with such surety or security or both as is acceptable to him." Therefore, in addition to the bond which an importer is required to furnish under Section 59 or 59A, as the case may be, if the importer desires to transport warehoused goods from on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture in bond facilities to export oriented industries." Instructions have been separately issued for further facilitating warehousing of goods at such stations by other industries also. Paragraph 3 of this letter is important and we would like to reproduce the same: "3. Normally for transfer of goods in bond from the import, of importation to an interior warehousing station under the provision of Section 67 - Cus. Act 62, it would be necessary that the goods are first warehoused at the port of importation and then removed from one bond to another. As this may entail difficulties for the importers/bonders, it has been decided that in deserving cases, the requirement of physical warehousing at the port of importation may be waived by the Assistant Collector of Customs subject to post facto approval of the Ministry. Urgently statements may be sent for this purpose." Accordingly right from 1975, the respondents are waiving the requirement of first warehousing at the port of importation in cases where the importer desires to warehouse goods at a warehouse outside Bombay. The respondents have further pointed out that in the cases which are. before us, the bond department, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly set out this position. The provisions of Section 67 and the Regulation are, therefore, clearly applicable to these petitioners also. All the importers and the Collectorate have accepted this position and have followed this practice from 1975 onwards. It is a settled practice, and we do not see any reason why we should unsettle it, especially when the documents executed by the petitioners themselves clearly show that these goods were considered as warehoused in Bombay and have been sent to a warehouse outside Bombay. Only the physical warehousing in Bombay has been waived. The first contention must, therefore fail. 14. Mr. Sethna, learned counsellor the respondents has further submitted that under Section 4 of the Customs Act, 1962, the Central Government may appoint such persons as it thinks fit to be the officers of Customs. Under the various notifications which have been issued from time to time under Section 4, such appointments are notified for the areas which are mentioned in those notifications. The officers have jurisdiction only over the area so specified. The jurisdiction of the Collector of Bombay is limited only to the Municipal Units of Greater Bombay. Mr. Sethna, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rters who had not defaulted iaproducing re-warehousing certificate in the past, shall also be required to follow the above mentioned procedure, but they will be required to furnish a Bank Guarantee to the extent of 25%. (c) In case of importers of heavy consignments or in bulk, the Collector will consider accepting a standard Bank Guarantee. There are other conditions attached to this class which we need not go into. Export Houses shall be treated at par with the categories of importers mentioned in (a) above. 18. It is necessary to look at the background in which these Public Notices have been issued. In this connection the respondents have annexed to their affidavit dated 9th July 1992 in Writ Petition No. 1501 of 1992, certain corresppndence,.which has been exchanged between the Central Board of Excise and Customs, New Delhi and the various Collectors of Customs. The first Ietter from the Central Board of Excise and Customs is addressed to all Collectors of Customs and Excise. It is dated 18th May 1990. In this letter the Board has pointed out that large scale evasion of Customs duty has been detected in cases of transfer of warehoused goods from the major ports to interio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. They are as follows : (1) 15% bank guarantee may be insisted from public sector undertakings/State/Central Government undertaking, 100% E.O.Us and Export Processing Zones, Manufactureing in bond units and ship stores, alongwith the transit bond equal to the amount of duty on the condition that re-warehousing certificates in respect of the consignments cleared should be produced within three weeks of the despatch failing which next consignment may be allowed only on transit bond supported by 100% bank guarantee. (2) Regular importers who have not defaulted in producing re-warehousing certificate in the past may be allowed to furnish bank guarantee equal to 25% of the duty amount alongwith transit bond on the same conditions mentioned above. (3) It case of importers of heavy (Consignments or in bulk, Collectors could consider accepting a standard bank guarantee. This running guarantee should be of adequate amount, which will be treated as a Security for all the transfers that are likely to be made, during the period of validity, of bank guarantee. The validity period of the bank guarantee should be renewed immediately before expiry. (4) For imports of highly sensitive nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he dictation of another authority while exercising that discretion. It de Smith's "Judicial Review of Administrative Action", Fourth Edition, at page 309 it is stated as under : "An authority entrusted with a discretion must not, in the purported exercise of its discretion, act under the dictation of another body or person ............... Authorities directly entrusted with statutory discretions, be they executive officers or members of distinct tribunals, are usually entitled and are often obliged to take into account considerations of public policy, and in some contexts the policy of a Minister or of the Governmeat as a whole may be a relevant factor in weighing those considerations, but this will not absolve them from their duty to exercise their personal judgment in individual cases, unless explicit statutory provision has been made for them to be given binding instructions by a superior, or possibly unless the cumulative effect of the subject matter and their hierarchical subordination (in the case of civil servants and local government officers) them to receive and obey instructions conveyed m the proper manner and form." In the light of this legal position we have to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etion under Regulation 5. They cannot be considered as mandatory. The learned counsel for the respondents has submitted that these are to be construed as guidelines for the exercise of discretion, in order that there may not be any arbitrary exercise of powers under the Regulations and there may be uniformity in the exercise of discretion. We are inclined to accept this submission. 26. Locked at from a slightly different angle, a perusal of all the documents which have been produced before as makes it dear that the two Public Notices which have been issued are based on the letters received from the Central Board of Excise and Customs. Under Section 5(1) of the Customs Act, 1962 the exercise of powers by the officers under the Act is subject to such conditions and the limitations as the Board may impose. In the present case it is as a result of the guidelines issued by the Board that the Collector has issued two Public Notices. Section 5(1), therefore, in terms provides for such-guidelines to be issued by the Central Board of Excise and Customs, in order to guide the exercise of powers granted to the officers under the provisions of the Act and the Regulations. Looked at in this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner, Punjab, reported in (1980) 57 PJR 94 where the Punjab and Haryana High Court also held that the standard table framed under Section 14B was reasonable and prevented the officers from acting arbitrarily. These cases, of course, do not apply directly. 29. We have to consider, looking to the scheme of the Customs Act and the Regulations, whether the Public Notices are in the nature of guidelines. For reasons which we have set out earlier, in our view, these Public Notices are in the nature of guidelines to prevent the officers from acting arbitrarily in the exercise of their discretion under Regulation 5. They do not supercede powers granted to the officers concerned. In none of these cases before us, have any of the petitioners applied for a special departure from the guidelines based on the special circumstances of their case. Therefore, we have not gone into this aspect. 30. The submission that the guidelines are beyond the scope of Section 67 also has no merit. Under Section 67 the proper officer has the power to impose conditions while granting permission for rewarehousing. Section 157 gives to the Board power to make regulations to provide inter alia, for condit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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