Joint Commissioner Of Customs (Port), Special Investigation Branch vs. Vinod Kumar Jain And Ors

Held

The Court held that while the writ court or the High Court cannot be converted into an executing court to enforce an order of the Commissioner of Customs that is under challenge before the CESTAT, a workable solution is necessary given the goods have been lying in the Customs area since September 2020. The Court modified the writ court's order. Regarding the retesting of goods, the appellant department was directed to draw representative samples in the presence of the importer and send them for testing to an accredited laboratory in Kolkata, with charges payable by the importer. This was to be without prejudice to the revenue's rights in its appeal before the Tribunal. Concerning the detention charges, the Court noted that no formal request for waiver had been made. Therefore, the importer was directed to submit a request for waiver of detention charges and issuance of a detention certificate within three days of receiving the demand, which the appropriate authority was to consider within ten days. Subject to the decision on this representation, the goods were to be permitted for warehousing to comply with the sample drawal and testing direction. The Court also requested the Tribunal to give an early hearing to the appeal, as the test report would be obtained without prejudice to the department's contentions before the Tribunal, and the Tribunal could consider interim relief based on the report.

Facts

The Joint Commissioner of Customs (Port), Special Investigation Branch, Kolkata (appellant/revenue) filed an appeal against an order dated September 29, 2021, in a writ petition. The writ petitioner, Vinod Kumar Jain (respondent/importer), had sought directions to destuff a container, permit warehousing of imported fabric under Section 49 of the Customs Act, 1962, draw fresh samples for retesting, and reimbursement of warehousing charges and container rent. The importer had declared 100% Polyester Knitted Fabric from China, but upon examination, the department prima facie concluded it was Tufted Textile Fabric. The Commissioner of Customs, vide an order dated June 15, 2021, rejected the declared classification, ordered classification under Customs Tariff 58023000, assessed duty amounting to Rs. 30,52,005/-, ordered confiscation of the consignment, and imposed a redemption fine and penalty. The revenue appealed this order to the CESTAT. The writ petition was filed while the appeal was pending. The writ court directed retesting of the goods, with charges borne by the importer.

Key Issues

1. Whether the writ petitioner is entitled to a detention certificate and consequential waiver of demurrage and other charges on the detained goods, in light of Regulation 10(a) of the Sea Cargo Manifest and Transhipment Regulation 2018 and Regulation 6(l) of the Handling of Cargo in Customs Area Regulations 2009, and the decision in HLG Trading vs. Commissioner of Customs, Chennai-II? 2. Whether the writ court or the High Court can be converted into an executing court to enforce an order passed by the Commissioner of Customs, which is under challenge before the CESTAT? Contentions of the Petitioner/Respondent: The petitioner argued that the goods were detained at the department's instance, preventing warehousing, and therefore, they are entitled to a detention certificate to waive charges. They relied on the aforementioned regulations and the Madras High Court's decision in HLG Trading. The petitioner also sought investigation into the alleged swapping of samples during the initial drawal and reimbursement of charges. Contentions of the Revenue/Appellant: The revenue argued that the writ court cannot execute the Commissioner's order, especially when it is under appeal before the CESTAT. The revenue also contended that the writ petition was filed within the limitation period for filing an appeal to the Tribunal, and thus, the importer could not compel execution through a writ petition.