Raj Grow Impex LLP Vs Union of India And Ors. (Bombay High Court)
Summary: The Bombay High Court considered a writ petition challenging the order dated 24th December, 2020 passed by the Commissioner of Customs (Appeals), Mumbai (Zone-1). In earlier proceedings concerning Raj Grow Impex LLP, the Court had directed release of specified imported goods after noting that the order-in-original was holding the field, had neither been set aside nor stayed, and that the petitioner had complied with its terms and made the necessary payments. By an order dated 9 December, 2020, the Court further modified its earlier judgment to direct release of seven additional Bills of Entry on payment of redemption fine, penalty, customs duty and other dues payable as per law. The impugned appellate order subsequently ordered absolute confiscation of goods covered by seven Bills of Entry and also dealt with goods covered by three Bills of Entry that had already been cleared. It further set aside a penalty of Rs.1,485 Crores imposed by the lower authority and imposed a penalty of Rs.5,00,00,000/- under Section 112(a)(i) of the Customs Act, 1962. The Bombay High Court prima facie found the appellate directions to be totally in contravention of its earlier orders and observed that when the High Court had directed release of the goods forthwith, it was beyond comprehension how a lower appellate authority could nullify that direction by ordering absolute confiscation. The Court stayed operation of the order dated 24th December, 2020 until further orders and directed compliance with its earlier orders dated 15 October, 2020 and 9 December, 2020.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Heard Dr.Kantawala, learned counsel for the petitioner; and Mr.Jetly, learned senior counsel for the respondents.
2. Challenge made in this writ petition is to the order dated 24th December, 2020 passed by the Commissioner of Customs (Appeals), Mumbai (Zone-1).
3. In the related writ petition filed by the petitioner i.e. Writ Petition (L) No.3502 of 2020, this court while disposing of the same had passed the following order on 15th October, 2020:-
“36.We have examined the grounds given in the order dated 01.10.2020 not as an appellate authority over the Commissioner but only to satisfy ourselves as to whether on such grounds a bona 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 129 D(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.
37. We have already discussed and noted that the order-in-original is holding the field. The same has neither been set aside nor stayed. Interestingly, respondent Nos.4 to 6 in para 16 of their affidavit have themselves admitted that the redemption fine and personal fine were levied proportionately to the quantity declared in the bills of entry. Petitioner has complied with the terms and conditions of the order-in-original and made the necessary payments. Out of charge has been issued. Because of warehousing of the goods under section 49 of the Customs Act, petitioner is required to pay a substantial amount to the customs authority. In the above context and after thorough consideration of all aspects of the matter, we are of the view that non-release or withholding of the imported goods of the petitioner any further would not be just and proper. At least the grounds given in the order dated 01.10.2020, which order itself was passed in a highly improper manner, do not justify that the goods should be withheld or denied release notwithstanding the order-in-original and compliance thereto.
Conclusion
38. Consequently, we direct the respondents more particularly respondent Nos.4 to 7 to forthwith release the goods of the petitioner covered by bills of entry bearing Nos.5720040, 5720192, 572069, 5722458, 5722730, 5719772, 5722243 and 5722456, all dated 18.11.2019. Similar direction also follows in Writ Petition No.3502 of 2020 in respect of bills of entry bearing Nos.5520732, 5520871 and 5520536, all dated 01.11.2019.
39. Both the writ petitions are accordingly allowed. We thought of imposing cost in this case but we have refrained ourselves from doing so.
40. While the judgment was pronounced, Mr. Singh, learned Additional Solicitor General made an oral prayer that the effect of the judgment should be kept in abeyance for a reasonable period to enable the contesting respondents to move the Supreme Court.
41. Having delivered the judgment, we find no good reason to keep the same in abeyance. Consequently, prayer made is rejected.”
4. Subsequently, on an interim application filed by theth petitioner, we had passed the following order on 09 December, 2020:-
“2 This interim application has been filed for making certain modification/addition in the judgment and order dated 15th October, 2020 whereby two writ petitions i.e. W.P. (L) No. 3503 of 2020 (M/s. Harihar Collections v/s. Union of India) and W.P. (L) No. 3502 of 2020 (M/s. Raj Grow Impex LLP v/s. Union of India) were allowed to the extent mentioned in the said judgment and order.
3. Applicant is the original petitioner in Writ Petition (L) No.3502 of 2020. 4 The said writ petition was filed seeking direction in prayer (b) to the respondents to clear the goods imported by the petitioner vide Bills of Entry Nos.5520732, 5520871 and 5520536 all dated 1st November, 2019. 5 Additionally, another prayer (c) was also made for direction to the respondents to release the imported goods vide seven Bills of Entry bearing Nos. 5520537, 5520538, 5520539, 5520540, 5520541, 5520872 and 5521191 on payment of redemption fine and penalty. 6 Since the two writ petitions were heard together, in paragraphs 4 and 4.1 of the judgment and order, the reliefs sought for were set out in the following manner:-
“4 By filing this petition under Article 226 of the Constitution of India, petitioner has sought for the following reliefs:-
(1) To set aside and quash communications dated 02.09.2020 of respondent Nos.5 and 6;
(2) To direct the respondents, more particularly respondent Nos.4 and 7, to clear the goods imported by the petitioner vide bills of entry bearing Nos.5720040, 5720192, 572069, 5722458, 5722730, 5719772, 5722243 and 57224576 all dated 18.11.2019. 4.1 In the other writ petition, i.e. Writ Petition No.3502 of 2020 in addition to relief No.1, petitioner seeks directions to the respondents, more particularly respondent Nos.4 and 7, to clear the goods imported by the petitioner vide bills of entry bearing Nos.5520732, 5520871 and 5520536, all dated 01.11.2019.”
6.1 Thus from the above, it is seen that prayer (c) made by the applicant in Writ Petition (L) No. 3502 of 2020 got omitted in paragraph 4.1.
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7.1 Finally, the two writ petitions were allowed in the following terms:-
“38 Consequently we direct the respondents more particularly respondent Nos.4 to 7 to forthwith release the goods of the petitioner covered by bills of entry bearing Nos. 5720040, 5720192, 572069, 5722458, 5722730, 5719772, 5722243 and 5722456 all dated 18.11.2019. Similar direction also follows in Writ Petition No.3502 of 2020 in respect of bills of entry bearing Nos.5520732,5520871 and 5520536 all dated 01.11.2019. 39 Both the writ petitions are accordingly allowed. We thought of imposing cost in this case but we have refrained ourselves from doing so.
7.2 From the above, we find that prayer clause (c) in W. P. (L) No.3502 of 2020 somehow got omitted from consideration and grant of consequential relief.
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9. Today, when the matter is called upon, Mr. Mishra, learned Counsel for Respondent Nos.1 to 6 in his usual fairness submits that though SLP has been filed, the said respondents have not been able to obtain any stay order from the Supreme Court.
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 well as in paragraph 38 thereof. The last line in paragraph 38 would thus read as under:-
“ In addition, respondent Nos.4 to 7 are also directed to forthwith release the goods of the petitioner covered by seven Bills of Entry bearing Nos. 5520537, 5520538, 5520539, 5520540, 5520541, 5520872 and 5521191 on payment of redemption fine, penalty, customs duty and any other dues that may be payable as per law.
11. Interim application is accordingly disposed of. No order as to costs.”
5.By the impugned order the appellate authority has issued the following directions:-
“ORDER
I. I order absolute confiscation of the goods covered in Bill of Entry Nos.5520537, 5521191, 5520538, 5520539, 5520540, 5520541 and 5520872 all dated 01.11.2019 under Section 111(d) of the Customs Act, 1962 read with Section 3(3) of Foreign Trade (Development & Regulations) Act, 1992.
ii. I order absolute confiscation of the goods covered under Bills of Entry Nos.5520732, 5520871 and 5520536 all dated 01.11.2019 under Section 111(d) of the Customs Act, 1962 read with Section 3(3) of Foreign Trade (Development & Regulations) Act, 1992. But, since the goods covered under these 03 Bills of Entry have already been cleared and not available for absolute confiscation, I am constrained to accept it as fait accompli and Redemption Fine already paid, if any, in this regard, is ordered to be appropriated.
iii. I set aside the Penalty of Rs.1,485 Crores imposed by the lower authority and impose a Penalty of Rs.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.”
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 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 thth of this court dated 15 October, 2020 and 9 December, 2020.
9. List on 27th January, 2021, on which date Mr.Jetly shall inform the court about compliance of today’s order.
10. This order will be digitally signed by the Private Secretary/Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.
