Case Number: Civil Appeal No(s). 2217-2218 of 2021 arising out of S.L.P. (C) Nos. 14633-14634 of 2020

Judges Name: Hon’ble Judges A.M. Khanwilkar J, Dinesh maheshwari J, Krishna murari J

Order dated: 17.06.2021

Facts of the Case:  

The Director General of Foreign Trade (DGFT) issued notifications for restricting the import of certain beans, peas and pulses (Goods) under the Foreign Trade (Development and Regulation) Act, 1992 (the Act). The Respondents, M/s. Raj Grow Impex LLP and M/s. Harihar Collections, had imported the Goods covered under the above said notification.  The Additional Commissioner of Customs, Mumbai vide Order dated 28-08-2020 ordered for confiscation of the Goods in view of the said Notifications. The Respondents had to pay fine, customs duty and penalty to redeem the Goods. However, DGFT in its letter dated 01.09.2020 refused to release the said Goods as they were restricted items and the Customs Authority did not release the Goods.

Aggrieved, the Respondents approached the Bombay High Court seeking mandamus for clearance of the Goods in question. The Commissioner of customs by its order dated 01.10.2020 pointed out the alleged deficiencies in the said Order and directed the said Authority to file an appeal before the Commissioner (Appeals). The Bombay High Court in its common order dated 15.10.2020 and held that the Respondents had complied with the terms and conditions of the Customs Authority and were incurring warehousing expenditure. The Hon’ble High Court issued directions to the Customs Authority to release the Goods and left the matter to be decided by the Commissioner (Appeals). Meanwhile, the Commissioner (Appeals) allowed the appeals by the order dated 24.12.2020 ordered for absolute confiscation of the Goods and enhanced the amount of penalty.

The Respondents challenged the order dated 24.12.2020 of the Commissioner (Appeals) in another Writ Petition before the Bombay High Court. The Hon’ble High Court observed that the directions issued by the Commissioner (Appeals) were contrary to the directions issued by the Bombay High Court in its Order dated 15-10-2020. Therefore, the Hon’ble High Court stayed the operation of the Order of the Commissioner (Appeals). Further The Hon’ble High Court directed the Authorities to comply with the Orders of the Bombay High Court. The High Court passed a separate order dated 05.01.2021 and issued show cause notice to the authorities concerned.

The Union of India and the Customs Authorities filed an Appeal before the Supreme Court and questioned the orders dated 15-10-2020 and 05-01-2021 passed by the Bombay High Court.

Order:

The Hon’ble Supreme Court held that the order of the High Court dated 15.10.2020 to release the Goods was clearly in contradiction with the Order of the Commissioner (Appeals) dated 24-12-2020 for absolute confiscation of Goods. The Hon’ble Court further observed that the reason behind the notifications issued by DGFT is to safeguard the agricultural economy of India and held that the Hon’ble high court failed to consider the same.

It further observed that the High Court failed to consider that the Respondents had an alternative remedy to approach the customs, Excise and Service tax appellate Tribunal against the Customs Adjudicating Authority’s Order dated 28.08.2020 for confiscation of the Goods. 

In view of the above, the Hon’ble Supreme Court allowed the appeals and set aside the order dated 15.10.2020 and order dated 05.01.2020.