Supreme Court orders Absolute Confistication of Peas and Pulses, re-export only after recovery of necessary Redemption Fine [Read Judgment]

Supreme Court - Confistication of Peas and Pulses - recovery of the necessary redemption fine - Taxscan

The Supreme Court ordered the absolute Confistication of Peas and Pulses and directed that re-export be allowed only after recovering the necessary redemption fine.

The appellant, Custom Authorities was aggrieved of the directions issued by the High Court for compliance of the orders-in-original 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 are, according to the appellants, liable to absolute confiscation.

The genesis lies in the notifications issued by the Central Government under the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act) 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.

In the preceding years, such notifications and trade notices were put to challenge in different High Courts by way of writ petitions wherein, different interim orders were passed and the importers affected various imports on the strength of such interim orders. However, the said writ petitions were ultimately dismissed by the High Courts and one petition seeking special leave to appeal was also dismissed by this Court. Similar notifications and trade notice issued in the subsequent year, on restriction of import of certain beans, peas and pulses, were again challenged in different High Courts and, notwithstanding the rejection of a similar challenge in the past by other High Courts, various interim orders were again passed; and the importers again proceeded to effect various imports under the cover of such interim orders.

Even though the High Courts initially took up the challenge to the said notifications and trade notices and granted interim orders but, ultimately, the writ petitions were dismissed. An attempt to challenge one of the decisions in this Court also failed with dismissal of the special leave petition.

The main plank of submissions in the 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.

The three judge Bench of Justice A.M.Khanwilkar, Justice Dinesh Maheshwari and Justice Krishna Murari said that one of the simple questions to be adverted to at the threshold stage in the present cases was, as to whether the importers (writ petitioners) 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, cannot be regarded as an irreparable one.

The bench further added 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 the appellants 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.

“In fact, the repercussion of the stay orders passed in the earlier years were duly noticed by this Court in Agricas; and unfortunately, more or less same adverse consequences had been hovering over the markets because of the imports made under the cover of the interim orders passed in relation to the notifications dated 29.03.2019. This, in our view, was not likely to happen if the material factors relating to balance of convenience and irreparable injury were taken into account while dealing with the prayers for interim relief in the writ petitions,” the Apex Court’s order read.

The Supreme Court allowed the while setting aside the orders passed by the High Court and approving the orders-in-appeal, the goods in question are to be held liable to absolute confiscation but with a relaxation of allowing re- export, on payment of the necessary redemption fine and subject to the importer discharging other statutory obligations. The respondent- importers being responsible for the improper imports as also for the present litigation, apart from other consequences, also deserve to be saddled with heavier costs.

The court ordered that the subject goods are held liable to absolute confiscation but, in continuity with the order in these appeals, it is provided that if the importer concerned opts for re-export, within another period of two weeks from today, such a prayer for re- export may 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 is exercised within two weeks from today, the goods shall stand confiscated absolutely.

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