SC held absolute confiscation of Peas And Pulses but re-export allowed subject to recovery of redemption fine

Union of India and Ors. Vs Raj Grow Impex LLP and Ors (Supreme Court of India)

Conclusion: The Court ordered the absolute Confiscation of Peas and Pulses but if the importer concerned opted for re-export, within another period of two weeks from today, such a prayer for re- export might be granted by the authorities after recovery of the necessary redemption fine and subject to the importer discharging other statutory obligations. If no such option was exercised within prescribed time, the goods should stand confiscated absolutely.

Held: Assessee were essentially aggrieved of the directions issued by the High Court for compliance of the orders-in-original dated 28.08.2020 passed by the Additional Commissioner of Customs, Group-I, Mumbai and consequently, for release of the goods imported by the private respondents though the goods in question were, according to the appellants, liable to absolute confiscation. The genesis of the present litigation lied in the notifications issued by the Central Government under the Foreign Trade (Development and Regulation) Act, 1992 as also the consequential trade notices issued by the Directorate General of Foreign Trade, making provisions for restricting the import of certain beans, peas and pulses. The relevant background aspects of the matter were 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 of a prior licence from DGFT. Then, by the notification dated 25.04.2018, import of the said beans/pulses was to remain restricted requiring a prior licence and with a stipulation as to annual quota for the fiscal year 2018-2019. One of the importers, M/s. H preferred a writ petition before the Madras High Court, challenging the notification dated 25.04.2018 and trade notices issued on 9^th, 16^th and 18^th May, 2018 respectively. The said assessee also prayed for interim relief, of permission to import peas as per the contracts. By the interim order dated 28.06.2018, the High Court stayed the operation of the notification dated 25.04.2018 and thereby, permitted imports without the requisite licence. Several other writ petitions were filed before different High Courts challenging the restrictions on import of these beans/peas/pulses and various interim orders were passed, staying the notifications; and leading to the effect of permitting imports without any restrictions as to quota or licence. The main plank of submissions in the said writ petitions was that DGFT, the statutory authority under the FTDR Act, was not authorised to issue an order amending the EXIM policy and such a power vested only in the Central Government in terms of Section 3(2) read with Section 6(3) of the FTDR Act. It was held that in the present cases question as to whether the importers (assesses) were likely to suffer irreparable injury in case the interim relief was denied and they were to ultimately succeed in the writ petitions. A direct answer to this question would have made it clear that their injury, if at all, would have been of some amount of loss of profit, which could always be measured in monetary terms and, usually, could not be regarded as an irreparable one. Another simple but pertinent question would have been concerning the element of balance of convenience; and a simple answer to the same would have further shown that the inconvenience which the importers were going to suffer because of the notifications in question was far lesser than the inconvenience which assessees were going to suffer (with ultimate impact on national interest) in case operation of the notifications was stayed and thereby, the markets of India were allowed to be flooded with excessive quantity of the said imported peas/pulses. These appeals deserve to be allowed and, while setting aside the orders passed by High Court and approving the orders-in-appeal, the goods in question were to be held liable to absolute confiscation but with a relaxation of allowing re­export, on payment of the necessary redemption fine and subject to the importer discharging other statutory obligations. The importers being responsible for the improper imports as also for the present litigation, apart from other consequences, also deserved to be saddled with heavier costs. The court ordered that the subject goods were held liable to absolute confiscation but, in continuity with the order in these appeals, it was provided that if the importer concerned opted for re-export, within another period of two weeks from today, such a prayer for re- export might be granted by the authorities after recovery of the necessary redemption fine and subject to the importer discharging other statutory obligations. If no such option was exercised within two weeks from today, the goods should stand confiscated absolutely.

FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER

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