In a recent Judgment Horizon Ferro Alloys Pvt. Ltd. & others vs Union of India, the division bench of Punjab and Haryana High Court has held that, If the goods are not expressly “prohibited” for importation, the petitioner company who is owner, as well as importer, would be entitled to an option to redeem the goods even upon adjudication.
The petitioner company has admitted misdeclaration in the three Bills of Entry and is willing to pay the differential duty on the Cigarettes for seeking its provisional release, and is willing to resort to statutory route of self-surrender by invoking jurisdiction of Settlement Commission for settlement of case at once upon issuance of show cause cum demand notice in respect of these three Bills of Entry. The settlement Commission is statutorily empowered to grant immunities from penalty, fine and prosecution under the Customs Act, 1962.
The petitioners submitted that although the R-22 Gas is a ‘restricted’ item for import, and the goods Cigarettes and the R-22 Gas were imported by concealment, however, none of these goods are expressly notified as ‘prohibited’ for importation. Imported Goods can only be seized under Section 110 of the Act when there exists a reasonable belief that the same are liable to confiscation under Section 111. In respect of such goods even if the same are confiscated upon the culmination of adjudication under Section 28 read with 124 of the Act, the owner/importer ‘shall’ be given an option to redeem the goods on payment of redemption fine in terms of Section 125 of the Customs Act. Section 110A of the Act provides for provisional release of seized goods even pending adjudication.
The division bench comprising Justice M.Jeyapaul and Justice Harinder Singh Sidhu has observed that in the context of Section 125 if the word “prohibited” is construed as to apply in respect of every violation of any regulation or restriction or statutory procedural requirement, the word ‘shall’ in said Section would be rendered redundant and meaningless. If the definition of ‘prohibited goods‘ is applied in the context of Section 125, it would result in absurdity rendering the word ‘shall’ redundant and otiose, because there cannot be any situation where the goods would be liable to confiscation under Section 111 and 113 as the case may be without there being any violation of the provisions under the Customs Act, 1962 or under any other law or rules, regulations made thereunder. Therefore, in the context of statutory provisions of Section 125, so as to give a meaningful application to both words ‘may’ and ‘shall’ used in the said Section, the definition of ‘prohibited goods‘ is inapplicable by application of settled principles of statutory interpretation. The Tribunal was therefore correct in observing that under Section 125 of the Customs Act, unless the importation or exportation of goods is expressly “prohibited” the Adjudication Authority would be obliged to offer to the Owner the goods an option to pay fine in lieu of confiscation.
Read the full text of the Judgment below.
