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Union of India (UOI) and Ors. vs. Raj Grow Impex LLP and Ors. - (Supreme Court) (17 Jun 2021)

When personal business interests of importers clash with public interest, the former has to give way to the latter



In present set of appeals, the Union of India and the authorities related with customs have questioned the orders dated 15th October, 2020 and 5th January, 2021, passed by the High Court. The Appellants are essentially aggrieved of the directions issued by the High Court for compliance of the orders-in-original dated 28th August, 2020 passed by the Additional Commissioner of Customs, 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 of the present litigation lies in the notifications issued by the Central Government under the Foreign Trade (Development and Regulation) Act, 1992 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. The root question in present matters is as to whether the goods in question are liable to absolute confiscation or they could be released with payment of fine in lieu of confiscation.

The goods in question, having been imported in contravention of the notifications dated 29th March, 2019 and trade notice dated 16th April, 2019; and being of import beyond the permissible quantity and without licence, are 'prohibited goods' for the purpose of the Customs Act. Once it is clear that the goods in question are improperly imported and fall in the category of 'prohibited goods', the provisions contained in Chapter XIV of the Customs Act, 1962 come into operation and the subject goods are liable to confiscation apart from other consequences.

The prohibition involved in the present matters, of not allowing the imports of the commodities in question beyond a particular quantity, was not a prohibition simpliciter. It was provided with reference to the requirements of balancing the interests of the farmers on the one hand and the importers on the other. Any inflow of these prohibited goods in the domestic market is going to have a serious impact on the market economy of the country. The cascading effect of improper imports in the previous year under the cover of interim orders was amply noticed by this Court in Union of India vs. Agricas LLP. This Court also held that, the imports were not bona fide and were made by the importers only for their personal gains.

As regards the imports in question, the personal interests of the importers who made improper imports are pitted against the interests of national economy and more particularly, the interests of farmers. This factor alone is sufficient to find the direction in which discretion ought to be exercised in present matters. When personal business interests of importers clash with public interest, the former has to give way to the latter. Further, not a lengthy discussion is required to say that, if excessive improperly imported peas/pulses are allowed to enter the country's market, the entire purpose of the notifications would be defeated. The discretion in the 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 had 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 the only proper exercise of discretion would be of absolute confiscation and ensuring that these tainted goods do not enter Indian markets.

The discretion could only be for absolute confiscation with levy of penalty. At the most, an option for re-export could be given to the importers and that too, on payment of redemption fine and upon discharging other statutory obligations.

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. Appeal allowed.


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