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Case Law Details

Case Name : Sufi Impex Vs Union of India (Gujarat High Court)
Appeal Number : R/Special Civil Application No. 2505 of 2023
Date of Judgement/Order : 23/03/2023
Related Assessment Year :

Sufi Impex Vs Union of India (Gujarat High Court)

Gujarat High Court held that when the goods are perishable in nature, the authorities should act with greater swiftness to proceed with the adjudicatory mechanism and take a final decision. Accordingly, conditional provisional release of goods granted.

Facts- The challenge in the petition is directed against the seizure memo dated 20.01.2022 issued by respondent no.4, which is common memo issued to all the petitioners under Section 11 of the Customs Act, 1962. The petitioners imported the goods of the description of fresh Kiwi fruits or assorted fresh Kiwi in four different Bills of Lading. The goods came to be seized by aforesaid seizure memo on the allegation that the petitioners misdirected in furnishing details in relation to the import of the said goods.

Upon examination, the respondent authorities found that Psytosanitary Certificate bearing no. 2166631 dated 09.05.2022 was used for clearing more than one consignment of similar quantity. It was found to have been used by as many as four different importers to clear the goods having declared Chile as origin.

Conclusion- Held that when the goods are perishable in nature, the authorities should act with greater swiftness to proceed with the adjudicatory mechanism and take a final decision.

When the petitioner has agreed to abide by the conditions which may be imposed in light of the decision of this court in M/s. A and A Shipping Services, which could be applied to guide the final order to be passed, this court is inclined to grant the prayer by allowing the provisional release of the goods.

As far as the conditions on which the goods may be released to the petitioner, the court leaves the said aspect to the competent authority concerned who shall prescribe the conditions on the lines of the conditions prescribed by this court in M/s. A and A Shipping Services exercising sound discretion in that regard and upon compliance of such conditions shall provisional release the goods.

FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT

In the facts and circumstances of the case and having regard to the request and consent of the learned advocates for the parties, this Special Civil Application was taken up for final consideration.

1.1 Rule returnable forthwith. Learned advocate Mr.Priyank Lodha waives service of Rule on behalf of respondents.

1.2 Heard learned advocate Mr. Hardik Modh for the petitioner and learned advocate for the respondent authorities.

2. Following prayers are advanced in the present petition filed under Article 227 of the Constitution,

a) To allow the petitioner to clear the goods imported through the Bills of Entry filed with the office of respondent no.3, the Deputy Commissioner of Customs, Kandla.

b) To quash and set aside the seizure memo dated 20.11.2022 issued by Respondent no.4, the Preventive Officer, Kandla Special Economic Zone, Kandla.

c) Not to initiate any actions for disposal of the goods imported through the Bill of entry filed with the office of Respondent no.3, the Deputy Commissioner of Customs, Kandla.

d) Set aside the letter dated 08.02.2023 issued by the Assistant/Deputy Commissioner (SIIB), Customs House, Kandla.

3. The petitioners no.1 to 3 are the proprietary concerns which are engaged in import and trade of various commodities including food items. Petitioner no.4 is the agent of petitioners no.1 to 3 who filed Bills of Entry and other documents on behalf of petitioner traders. The petitioners are having the GST registration, the details of which are given in first paragraph of the petition.

3.1The challenge in the petition is directed against the seizure memo dated 20.01.2022 issued by respondent no.4, which is common memo issued to all the petitioners under Section 11 of the Customs Act, 1962. The petitioners imported the goods of the description of fresh Kiwi fruits or assorted fresh Kiwi in four different Bills of Lading. The goods came to be seized by aforesaid seizure memo on the allegation that the petitioners misdirected in furnishing details in relation to the import of the said goods.

3.2 The goods were imported under Bills of Entry No. 1017867 dated 16.11.2022. The goods were of Chilion origin, routed through Dubai to reach the destination Port. The goods were covered by Bill of Entry No. 1017867 dated 16.11.2022. It was supported by Psytosanitary Certificate of Dubai authorities bearing no. 2129947 dated 10.10.2022 and Psytosanitary Certificate issued by Chile bearing No. 2171104, 2171710, 2166631, 2158829 dated 09.05.2022. The Bill of Lading of Dubai was dated 14.11.2022.

3.3 Upon examination, the respondent authorities found that Psytosanitary Certificate bearing no. 2166631 dated 09.05.2022 was used for clearing more than one consignment of similar quantity. It was found to have been used by as many as four different importers to clear the goods having declared Chile as origin.

3.4 The authorities proceeded to exercise their powers under section 110 of the Customs Act, 1962, and seized the goods. As stated above, in the seizure memo, it was inter alia stated that the same Psytosanitary Certificate bearing no.2166631 was used many times for similar quantity. The names of the parties who used the same Psytosanitary Certificate included A & A Shipping Services.

4. Pressing the only prayer advanced in the petition as above, learned advocate for the petitioner submitted that the goods are of perishable nature, which are lying with the authorities since the date of seizure, that is 20.11.2022 and since they are perishable in nature, they are on the verge of perishment to result into serious financial loss and also prejudice to the petitioner who has already requested the authorities to clear the goods. It was submitted that the petitioner is ready to comply with the conditions which may be imposed for the purpose of provisional release.   It was next submitted that section 110A of the Customs Act,1962  permits provisional release of  goods pending the
adjudication.

4.1 In addition to the above submissions, learned advocate for the petitioner relied on the decision of this Court in M/s. A and A Shipping Services vs. Union of India being Special Civil Application No. 23784 of 2022 decided on 29.11.2022. It was submitted that in the said case, the Court entertained the prayer for provisional release of the goods which were the very goods-fresh Kiwis Fruits and seizure of the goods in that case was on the identical ground. Learned advocate for the petitioner submitted that the same conditions may be imposed and the relief to the petitioner may be granted.

4.2 Learned advocate for the respondent on the other hand relied on the affidavit-in-reply to oppose the prayer. He raised various contentions on the basis of the contents of the affidavit-in-reply.

5. While the court has gone through the averments and contentions raised in the affidavit, they primarily relate to repeat use of the Phytosanitary Certificate for more than one consignment. It is not the stand of the authorities for seizure of the goods that the goods are unfit for human consumption. It was accepted by the respondent authorities also that it is not the ground that the goods are not worth of human consumption.

5.1 Section 110A of the Customs Act, 1962 reads as under,

“110A.- Provisional release of goods, documents and things seized or bank account provisionally attached pending adjudication– Any goods, documents or things seized or bank account provisionally attached under section 110, may, pending the order of the adjudicating authority be released to the owner or the bank account holder on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require.”

5.2 Under the statutory provisions, the seizure of the goods would follow the inquiry and investigation to be further followed by adjudication process which may or may not ultimately lead to confiscation of imported goods as contemplated in section 111 of the Act. The stage of inquiry has yet not been started. It is reflected that though goods were seized on 20.11.2022, so far the petitioner is not issued show cause notice. In any case, the adjudicatory proceedings have not started.

5.3 The court finds that when the goods are perishable in nature, the authorities should act with greater swiftness to proceed with the adjudicatory mechanism and take a final decision.

5.4 As far as the prayer for provisional release of the goods are concerned, it could be considered not only on the basis of the facts obtaining, but also in view of decision of M/s. A and A Shipping Services (supra) as could be gathered from the contents of para 9.2 of the said decision. In that case, the seizure of the goods of very nature was based on identical allegation namely that the same Phytosanitary Certificate issued by the Chilen authorities were used for different consignments by different importers.

5.5 Para 9.2 of may be extracted from the said decision,

“On perusal of the documents submitted by the importer and it was noticed that the same Phytosanitary Certificate issued by the Chilean authorities were being used for different consignments by different importers. It is given a detail as to how the two Phytosanitary certificates issued by the Chile are mentioned in the other certificates and therefore, according to the respondent, the documents could be the forged documents showing the Country­ofOrigin of Chile. Another importer M/s.Saify Enterprise also has used the said Phytosanitary certificate. They are also suspicious about the Phytosanitary certificate bearing Nos .2158830 dated 26.04.2022, 2171104 dated 17.05.2022 & 2167596 dated 11.05.2022. The vessel has reached at Mundra Port on 05.10.2022, it takes about 04 to 05 days from Jabel Ali Port, Dubai to Mundra Port. Therefore, also it has suspected the certificates.”

6. The case of the petitioner herein is further additionally comparable with the facts of the said case, as the very certificates which were subject matter of allegations in M/s. A and A Shipping Services (supra) are the certificates mentioned in the impugned seizure memo with the allegations that they were used for shipping clearance for more than one consignments. The Division Bench considered the provisions of the Customs Act including sections 110, 110A and 112 and further relying on the decision of the Madras High Court in Writ Appeal No. 377 of 2016 in Malabar Diamond Gallery Pvt. Ltd. vs. Additional Director, DRI Chennai & Ors. as well as the decision of this court in Besto Tradeling Limited vs. Principlal Commissioner of Customs being Special Civil Application No. 1796 of 2022 and took the view that the authorities were required to release the goods which were of perishable in nature.

6.1 It was noted by the court that the petitioner therein had paid the tax. In that view of the matter, the Division Bench deemed it proper to impose suitable conditions of furnishing of bank guarantee, furnishing of bond and obtaining undertaking of the Manager Director as directed in para-19 of the order to permit the provisional release. The review application filed against the siad judgement came to be dismissed.

7. The Bill of Entry in the present case indicated that they relate to fresh Kiwi fruits of the description mentioned therein. They are perishable foods. The adjudication is pending, not yet started.

7.1 In the facts and circumstances of the case, when the petitioner has agreed to abide by the conditions which may be imposed in light of the decision of this court in M/s. A and A Shipping Services (supra), which could be applied to guide the final order to be passed, this court is inclined to grant the prayer by allowing the provisional release of the goods.

7.2 As far as the conditions on which the goods may be released to the petitioner, the court leaves the said aspect to the competent authority concerned who shall prescribe the conditions on the lines of the conditions prescribed by this court in M/s. A and A Shipping Services (supra) exercising sound discretion in that regard and upon compliance of such conditions shall provisional release the goods.

7.3 The authorities shall permit the release of the goods as per the following directions.

(i) The petitioner shall pay the entire due tax amount, if not paid within three days.

(ii) The competent authority of the respondents shall proceed to determine the conditions to be imposed against the petitioner for the purpose of release of the goods, which may include furnishing of bank guarantee, furnishing of bond and undertaking from the person at the helm of affairs of the company on the very lines of order passed by this Court in M/s. A and A Shipping Services (supra).

(iii) the conditions regarding furnishing of bank guarantee, furnishing of bond and including payment of tax, shall be the conditions to be satisfied by the petitioner primarily as condition precedent for release of the goods.

(iv) Any other conditions such as seeking certain documents, which may be prescribed by the authorities shall be treated as subsidiary conditions, for compliance shall be ensured, which appropriate time, if required, shall be given to the petitioner. However, non-compliance of those conditions shall not be a ground not to release the goods.

(v) The entire exercise above including the release of the goods shall be within five days from the date of receipt of copy of this order.

8. It is observed that adjudicatory process shall start and shall be completed expeditiously.

9. It is clarified that this court has not gone into nor has expressed any thing about rival merits in case, to be finally determined by the adjudicating authorities.

10. The petition stands disposed of in the above terms.

Direct service is permitted.

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