M/S. L.N.S. Impex vs. Officer Of The Principal Commissioner Of Customs

Held

The Court held that the petitioner cannot challenge the direction for re-export after having initially agreed to it and paid the redemption fine, as they had invited the order by their request. Regarding the second issue, the Court found that plant growth regulators are freely importable under the Import Policy, but subject to registration under the Insecticides Act, 1968. This requirement for registration constitutes a restriction on free import. Citing the Supreme Court decision in Brooks International, the Court stated that a "restriction" is a type of prohibition. Therefore, goods imported without complying with the registration requirement can be treated as prohibited goods. Consequently, the Court found no fault with the respondents in treating the goods as prohibited and dismissing the writ petition. The Court noted that the decision in M/s. Atul Automations Pvt. Ltd. relied upon by the petitioner did not consider the impact of the Foreign Trade Policy and the Foreign Trade (Development and Regulation) Act, 1992, in the same manner as the present case. The Court also acknowledged that the Supreme Court's decisions in Om Prakash Bhatia and subsequent cases have held the field regarding non-fulfillment of import conditions leading to goods being branded as prohibited.

Facts

The petitioner, M/s. L.N.S. Impex, imported 8000 kgs of "MOREKING" (a plant growth regulator) and 2500 kgs of another product under a bill of entry dated 31.10.2017. The petitioner applied for a no objection certificate from the Central Insecticides Board, but no order was passed. Consequently, the respondents did not clear the goods, and demurrage increased. The petitioner requested permission to re-export the goods on 13.12.2017. On 29.01.2018, the 1st respondent ordered confiscation of the goods, offering an option to redeem them for re-export upon payment of a fine of Rs. 1,50,000/-. The petitioner paid the fine but the supplier refused to accept the goods. The petitioner's subsequent request to redeem the goods for home consumption was also rejected, leading to the present writ petition.

Key Issues

1. Whether a direction for re-export is beyond the purview of Section 125(1) of the Customs Act, 1962, and if so, can the petitioner challenge this aspect after initially agreeing to re-export? The petitioner argued that a direction for re-export is beyond the scope of Section 125(1) of the Customs Act, 1962, and that such a direction cannot be issued if the imported goods are not prohibited. The respondents contended that the petitioner initially accepted to re-export the goods and paid the fine, thus they cannot go back on this agreement. They further argued that the goods in question, being plant growth regulators imported by an unregistered person, amount to prohibited goods. 2. Whether the imported goods, plant growth regulators, are prohibited goods under Section 2(33) of the Customs Act, 1962, given that the importer is not registered under the Insecticides Act, 1968? The petitioner contended that the goods are not prohibited, and the requirement of registration is merely a restriction. The respondents argued that non-compliance with the registration requirement under the Insecticides Act, 1968, makes the goods prohibited.