UNION OF INDIA & ORS. versus M/S. RAJ GROW IMPEX LLP & ORS.

Citation: [2021] 12 S.C.R. 371 · Decided: 17-06-2021 · Supreme Court of India · Bench: A.M. KHANWILKAR · Disposal: Appeal(s) allowed

cites 6 · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
371
   [2021] 12 S.C.R. 371
371
UNION OF INDIA & ORS.
v.
M/S. RAJ GROW IMPEX LLP & ORS.
(Civil Appeal No(s). 2217-2218 of 2021)
JUNE 17, 2021
[A. M. KHANWILKAR, DINESH MAHESHWARI AND
KRISHNA MURARI, JJ.]
Customs Act, 1962 – ss.2(33), 11(1) and 111(d) – Import –
‘prohibited goods’ – Appellants aggrieved of directions issued by
High Court in its writ jurisdiction for compliance of orders-in-
original dated 28.08.2020 passed by the Additional Commissioner
of Customs and consequently, for release of goods imported by
private respondents though the goods in question, according to
appellants, were liable to absolute confiscation – Nature of the goods
in question – Held: On facts, import of the referred goods was
restricted to a particular quantity and could be made only against
a licence – The letter and spirit of the restriction was that, any
import beyond the specified quantity was clearly impermissible and
prohibited –The goods in question, having been imported in
contravention of the notifications dated 29.03.2019 issued by the
Central Government as also the trade notice dated 16.04.2019,
issued by the DGFT; and being of import beyond the permissible
quantity and without licence, were ‘prohibited goods’ for the purpose
of the Customs Act – Foreign Trade (Development and Regulation)
Act, 1992 – s.3.
Customs Act, 1962 – s.125 – Import – ‘prohibited goods’ and
‘other goods’ – Distinction between – Latter part of s.125 obligates
the release of confiscated goods (i.e., other than prohibited goods)
against redemption fine but, the earlier part of this provision makes
no such compulsion as regards the prohibited goods; and it is left
to the discretion of the Adjudicating Authority that it may give an
option for payment of fine in lieu of confiscation – If the
Adjudicating Authority does not choose to give such an option, the
result would be of absolute confiscation – Principles to be applied
for exercise of discretion so available in the first part of s.125(1) –
Held: Exercise of discretion is a critical and solemn exercise, to be
A
B
C
D
E
F
G
H
372
SUPREME COURT REPORTS
[2021] 12 S.C.R.
undertaken rationally and cautiously and guided by law; according
to rules of reason and justice; and based on relevant considerations
– The purpose behind leaving such discretion with the Adjudicating
Authority in relation to prohibited goods is to ensure that all the
pros and cons shall be weighed before taking a final decision for
release or absolute confiscation of goods – On facts, orders-in-
original dated 28.08.2020 of the Adjudicating Authority cannot be
said to have been passed in a proper exercise of discretion – The
Adjudicating Authority did not even pause to consider if the other
alternative of absolute confiscation was available to it in its discretion
as per the first part of s.125(1) of the Customs Act and proceeded
as if it has to give the option of payment of fine in lieu of confiscation
– Such exercise of discretion by the Adjudicating Authority was
more of assumptive and ritualistic nature rather than of a conscious
and cautious adherence to the applicable principles – When personal
business interests of importers clash with public interest, the former
has to, obviously, give way to the latter – Further, if excessive
improperly imported goods are allowed to enter the country’s market,
the entire purpose of the notifications would be defeated – Discretion
in cases of present nature, involving far-reaching impact on national
economy, cannot be exercised only with reference to the hardship
suggested by the importers, who made such improper imports only
for personal gains – The imports in question suffer from the vices
of breach of law as also lack of bona fide and accordingly held
liable to absolute confiscation but with a relaxation of allowing re-
export, on payment of necessary redemption fine and subject to the
importer discharging other statutory obligations – No leniency in
the name of equity can be claimed by the importers – Respondent-
importers being responsible for improper imports as also for the
present litigation, apart from other consequences, also deserve to
be saddled with heavier costs – Respondent-importers to pay costs
of litigation to appellants, quantified at Rs. 2,00,000/- each.
Import-Export – Adjudicating Authority, while ordering
confiscation, gave option to the importers to redeem the goods in
question on payment of fine in lieu of confiscation u/s.125(1) of the
Customs Act – However

Excerpt shown. Read the full judgment & AI analysis in Lexace.