Summary
Following Agricas, importers sought release of peas and pulses brought in without licences and beyond notified quotas under interim court orders. The Supreme Court held these to be prohibited goods and found that redemption for domestic sale would defeat the restrictions protecting farmers and the domestic market. It set aside the High Court's release orders, approved the appellate confiscation and penalties, and allowed a two-week option to seek re-export on payment of the requisite fine and statutory dues. Without that option being exercised, absolute confiscation followed.
Issues
- Whether imports contrary to licensing and quantitative restrictions were prohibited goods.
- Whether redemption for domestic sale was a lawful exercise of discretion on these facts.
- Whether the High Court could direct release while leaving the statutory appeal undecided.
Provisions considered
- Section 3, Foreign Trade (Development and Regulation) Act, 1992Imports contrary to the section 3(2) notifications attracted section 3(3)'s deeming prohibition under customs law. (¶¶ 64, 65, 66, 66.1, 66.2, 68)
- Sections 2(33) and 111(d), Customs Act, 1962Goods imported beyond the permissible quota and without the required licence were prohibited and liable to confiscation; restrictions may constitute prohibitions for this purpose. (¶¶ 64, 65, 66.2, 67.1, 67.2, 67.3, 67.4.3, 68)
- Section 125(1), Customs Act, 1962Redemption of prohibited goods was discretionary, not mandatory. The discretion had to account for statutory purpose, public interest and all relevant alternatives; the original authority's assumption that redemption must follow was defective. (¶¶ 69, 69.1, 70, 71, 71.1, 72, 76.1, 76.2, 78, 79, 80, 81, 82, 84)
- Section 129D, Customs Act, 1962The residual power to require departmental recourse to the appellate forum was not revision stricto sensu; the Commissioner had jurisdiction to invoke it in these proceedings. (¶¶ 53, 53.1, 53.2, 54, 54.1, 54.2)
Held
- The imports were prohibited goods because they exceeded the notified quantitative limits and lacked licences. Atul Automations did not establish that every unauthorised import remains merely restricted or must be redeemed. (¶¶ 65, 66, 66.1, 66.2, 67.4.1, 67.4.2, 67.4.3, 68)
- The High Court could not both reserve the merits for the Commissioner (Appeals) and order release that would render the appeal ineffective. Its later treatment of expressly prima facie observations as binding merits findings was also erroneous; an available statutory tribunal remedy had been bypassed. (¶¶ 54.3, 54.4, 55, 55.1, 56, 57, 58, 59, 60, 60.1, 60.2, 61)
- On these particular imports, already found wanting in bona fides in Agricas, domestic release would frustrate the notified policy protecting farmers and the market. Absolute confiscation with penalties was the proper outcome, subject to the limited re-export option; this did not remove section 125 discretion in every prohibited-goods case. (¶¶ 69.1, 71, 76.1, 78, 79, 80, 81, 82, 84, 85, 86.1, 86.2)
- The respondent-importers' confiscation and enhanced penalties were finally approved, and further statutory appeals on those issues were not reserved. The interveners were bound by the findings but retained appeal options concerning only the amounts payable, including penalties. (¶¶ 87, 88, 88.1, 89, 90, 97(d), 97(e), 98)
- Importers could seek re-export within two weeks, subject to the necessary redemption fine and other statutory obligations; otherwise the goods stood absolutely confiscated. Each respondent-importer was ordered to pay Rs.2 lakh costs. (¶¶ 96, 97(f), 99)
- Interim relief requires meaningful assessment of balance of convenience, irreparable injury and risk of injustice, beyond a prima facie case. Commercial loss measurable in money had to be weighed against the wider public consequences of permitting these imports. (¶¶ 91, 91.1, 92, 92.1, 93, 94, 95)
Result
Union appeals allowed; High Court release orders set aside and original redemption orders quashed. Appellate confiscation and penalties approved, subject to the two-week re-export option; Rs.2 lakh costs payable by each respondent-importer. Interveners retained only quantum-related appeal options.