Kerala High Court
Jagdev Damodaran vs Deputy Commissioner Of Customs (Acc) on 8 November, 2016
Author: Shaji P.Chaly
Bench: Shaji P.Chaly
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
FRIDAY, THE 10TH DAY OF FEBRUARY 2017/21ST MAGHA, 1938
WP(C).No. 2289 of 2017 (I)
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PETITIONER(S):
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JAGDEV DAMODARAN,
S/O.DAMODARAN,
R/O.AKSHARA HOUSE,
VAIKOM, KOTTAYAM, KERALA.
BY ADVS.SRI.P.A.AUGUSTIAN
SRI.M.A.BABY
SMT.LINDA.M.J.
RESPONDENT(S):
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DEPUTY COMMISSIONER OF CUSTOMS (ACC),
AIR CARGO COMPLEX,
NEDUMBASSERY AIR PORT, COCHIN-683 111.
BY ADV. SREELAL N. WARRIER, SC
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 02-02-2017, THE COURT ON 10-02-2017 DELIVERED THE
FOLLOWING:
skg
WP(C).No. 2289 of 2017 (I)
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APPENDIX
PETITIONER(S)' EXHIBITS
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EXHIBIT P1- TRUE COPY OF THE DETENTION RECEIPT NO.542 DATED
08/11/2016.
EXHIBIT P2- TRUE COPY OF THE LETTER DATED 20/12/2016.
EXHIBIT P3- TRUE COPY OF THE NOTIFICATION NO.16/2015-2020
DATED 27/07/2016.
RESPONDENT(S)' EXHIBITS
----------------------- NIL
/TRUE COPY/
P.S. TO JUDGE
SKG
C.R.
SHAJI P. CHALY, J.
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W.P.(C) No.2289 of 2017
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Dated this the 10th day of February, 2017
JUDGMENT
This writ petition is filed by the petitioner seeking direction to the respondent to release the goods to the petitioner detained as per Ext.P1 detention receipt dated 08.11.2016, and for other related reliefs.
2. Petitioner is a Non-Resident Indian. While returning to India, petitioner carried a few items including a 'drone' which is meant for use in petitioner's Photo Studio in Ernakulam. On arrival in India, petitioner made true declaration regarding presence of Drone. But, alleging that import of drone is prohibited, the same is detained by the respondent on 08.11.2016, as per Ext.P1. Though petitioner made a request as per Ext.P2 dated 20.12.2016, for release of drone, respondent is forcing the petitioner to re-export. Though as per Ext.P3 dated 27.07.2016 drones are brought under restricted category, such goods are not prohibited to import. As per Sec.80 of the Customs Act, 1962, goods which are prohibited alone can be detained. It is submitted by the W.P.(C) No.2289 of 2017 2 petitioner that, drones are available even on on-line shopping, and large number of engineering students are assembling drones as part of their project during their study. Drones are generally permitted as long as they fly over private property. If anyone wishes to fly drone over public property, permission should be obtained from the local authorities. Till Ext.P3 notification, there was no restriction to import drones. It is also stated, there is no notice or information given, regarding the restriction or prohibition to import. According to the petitioner, the entire actions of the respondent are illegal and unsustainable under law, and therefore, the respondent may be directed to release the goods detained as per Ext.P1.
3. Respondent has filed a statement and among other contentions, it is stated that, petitioner on his arrival on 08.11.2016 brought one Drone along with his personal baggage. The Ministry of Commerce & Industry, Department of Commerce, Directorate General of Foreign Trade, vide Notification No.16/2015-2020 dated 27.07.2016 (Ext.P3) has introduced policy condition for import of Unmanned Aircraft System (UAS)/Unmanned Aerial Vehicle (UAVs)/Remotely Piloted Aircraft (RPAs)/Drones as "Restricted". The Policy W.P.(C) No.2289 of 2017 3 Condition 'Restricted' is defined under ITC (HS), 2017, Schedule I - Import Policy as items, import of which is permitted under an Import Licence/Authorization/Permission granted by the Director General Foreign Trade (DGFT). It further stipulates that Application for import of 'Restricted' items may be made in ANF 2B, as per detailed policy/procedure prescribed in Chapter 2 of FTP and HBPvI. Further, as per Notification No.16/2015-2020 dated 27.07.2016, import of "Drone" require prior clearance of the Directorate General of Civil Aviation and import license from DGFT.
4. It is also stated, as per Sec.2(33) of the Customs Act, 1962, "Prohibited goods" means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which, the conditions subject to which the goods are permitted to be imported, or exported, have been complied with. In the instant case, the passenger has not produced any clearance of the DGCA and import license from DGFT, as required for clearance of the drone imported by him, which thus means, petitioner has failed to W.P.(C) No.2289 of 2017 4 comply with the conditions subject to which the goods are permitted to be imported. Therefore, the drone brought by him has acquired the character of "Prohibited goods" as defined under the Customs Act, 1962. Hence, the drone imported by the petitioner is detained lawfully as a 'Prohibited item' vide Ext.P1 Detention Receipt. The contention raised by the petitioner with respect to non-issuance of trade notice or information is refuted by the respondent stating that the said information is available in the public domain, and therefore, ignorance of law is not an excuse to import any restricted or prohibited item. The petitioner himself has stated that he has imported the drone for commercial purposes, i.e., for commencing a studio and hence the same is not a bonafide baggage, as envisaged by Baggage Rules, 2016. Therefore, it is submitted that, petitioner may be directed to comply with the conditions contained in Ext.P3 notification for clearance of the goods, failing which, the goods will have to be adjudicated as mandated under the provisions of the Customs Act, 1962. It is also stated that the writ petition is premature in nature. W.P.(C) No.2289 of 2017 5
5. Heard learned counsel for the petitioner and the learned Standing Counsel appearing for the respondent. Perused the documents on record and the pleadings put forth by the respective parties.
6. The question to be resolved, revolves around Ext.P3 Notification dated 27.07.2016 issued by the Ministry of Commerce & Industry, Department of Commerce, Government of India, under which a restriction is created with respect to import of drones along with other similarly functional Aircraft systems. As discussed above, in order to import a drone, prior clearance of the Director General of Civil Aviation and import license from DGFT is required. According to the learned counsel for the petitioner, so far as there is no prohibition created under the Customs Act, for the import of drone, merely because a restriction is created as per Ext.P3, the goods cannot be detained. It is also contended that, after the adjudication proceedings as per Sec.125 of the Customs Act, option to pay fine in lieu of confiscation can be ordered by the adjudicating authority, and therefore, the goods could be provisionally released to the petitioner, as requested in Ext.P2 application. In that regard, learned counsel invited my W.P.(C) No.2289 of 2017 6 attention to Sec.110A of the Customs Act, which read thus:
"110A. Provisional release of goods,
documents and things seized pending
adjudication.--Any goods, documents or things seized under section 110, may, pending the order of the adjudicating authority, be released to the owner on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require."
7. Learned counsel has relied on the following judgments, in order to canvass the said proposition:
(i) 'Horizon Ferro Alloys Pvt. Ltd. v. Union of India' [2016 (340) E.L.T 27 (P & H)].
(ii) 'City Office Equipments v. Commissioner of Customs (Seaport-Import), Chennai-I' [2015 (316) E.L.T 199 (Mad.)]
(iii) 'Navshakti Industries Pvt. Ltd. v.
Commissioner of Customs, ICD, TKD, New Delhi' [2011 (267) E.L.T 483 (Del.)]
(iv) 'Bhaiya Fibres Ltd. v. Addl. Director General of Revenue Intelligence' [2012 (281) E.L.T 396 (Del.)]
8. On the other hand, learned Standing Counsel for the respondent relying on Sec.2(33) of the Customs Act, submitted that, in effect, the drone brought in by the petitioner becomes a prohibited goods, since prior permission and import license W.P.(C) No.2289 of 2017 7 are not secured from the DGCA and DGFT. Learned counsel has also invited my attention to Sec.3 of the Foreign Trade (Development and Regulation) Act, 1992 in that regard, which read thus:
"SECTION 3. Powers to make provisions relating to imports and exports.--(1) The Central Government may, by Order published in the Official Gazette, make provision for the development and regulation of foreign trade by facilitating imports and increasing exports.
(2) The Central Government may also, by Order published in the Official Gazette, make provision for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the Order, the import or export of goods or services and technology.
Provided that the provisions of this sub-section shall be applicable, in case of import or export of services or technology, only when the service or technology provider is availing benefits under the foreign trade policy or is dealing with specified services or specified technologies.
(3) All goods to which any Order under sub-
section (2) applies shall be deemed to be goods the import or export of which has been prohibited under section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly.
(4) without prejudice to anything contained in any other law, rule, regulation, notification or order, no permit or licence shall be necessary for import or export of any goods, nor any goods shall be prohibited for import or export, as may be required under this Act, or rules or orders made thereunder".
W.P.(C) No.2289 of 2017 8
9. Therefore, according to the learned Standing Counsel, when there is a restriction created for import of drone, as per Ext.P3, petitioner ought to have secured necessary permission/licence from the DGCA and DGFT. Having not done so, the detention of the goods as per Ext.P1 is in accordance with law. Therefore, if the petitioner makes available necessary orders as per Ext.P3, the goods can be released to the petitioner, otherwise petitioner will have to face the adjudication proceedings, and provisional release of the goods is not possible in view of the prohibition.
10. Learned Standing Counsel has also relied on the judgment of the Apex Court in 'Anirudh Singh Katoch v. Union of India and others' [2010 (12) SCC 368 : 2010 KHC 4315] and invited my attention to paragraph 7, wherein the issue with respect to an import of a fire arm vis-a-vis Sec.10 of Arms Act, 1959 was dealt with, which according to the learned counsel, is a synonymous circumstance. So also, a writ petition dealt with by this Court in 'Kuruvilla v. Union of India' [1999 KHC 55 : 1999 (1) KLT 99] was brought to my attention, wherein import of a water scooter without a license was considered. Accordingly, it is submitted, petitioner is not W.P.(C) No.2289 of 2017 9 entitled to secure any reliefs as sought for in the writ petition.
11. Having evaluated the fact situation, the principles of law laid down by various High Courts, and the arguments advanced, I am of the considered opinion that in all those cases, the question with respect to the restrictions made was on account of the liability to pay the import duty etc. etc. on goods imported in the context of 'prohibited' or 'non- prohibited'. Here is a case where the restriction made is securing prior permission/licence from the two statutory authorities of the Government of India. Therefore, the restriction is a pre-condition to import goods. Petitioner has not challenged Ext.P3 Notification issued by the Government of India. The reason for which Ext.P3 Notification was issued by the Government of India is not discernible. Anyhow, the same is a notification issued by the Government in the year 2016, and even according to the petitioner, till such time, there was no restriction or prohibition to import drone. Therefore, Ext.P3 notification issued can only be on the basis of convincing reasons to the Central Government. In this regard, the reliance placed by the Standing Counsel at the proposition of law laid down by the Apex Court in 'Anirudh Singh Katoch' W.P.(C) No.2289 of 2017 10 and this Court in 'Kuruvilla' supra, assume importance.
12. In that view of the matter, when applications are submitted seeking such permissions/licences, the concerned statutory authorities are getting opportunity to ascertain the real intention of importing a restricted product, which thus means, only after making an evaluation with respect to the import, the permission/licence is liable to be granted, by the Government of India. Petitioner has not undertaken such an exercise. Therefore, when there is a restriction created as a pre-condition, if the goods are provisionally directed to be released, the restriction looses its value, primacy and importance, which is not expected as per Ext.P3 notification. So also, when a restriction is created, it cannot be treated as a casual affair, and the provisional release of the goods can be ordered.
13. I am also convinced that, after the adjudication process, the release of the goods in lieu of the confiscation is a discretion left with the adjudicating authority, since under Sec.125, the terminology used is "may". When there is a clear restriction created, and if the adjudicating authority is permitting to release the goods, overlooking such a restriction W.P.(C) No.2289 of 2017 11 of pre-condition, then the purpose of the restriction is defeated. The restrictions are created by orders of the Government of India and the permissions to be secured are from the superior authorities of the Government of India and therefore, such restrictions are binding on the adjudicating authority.
14. Moreover, 'imported goods' defined under Sec.2(25) of the Customs Act includes all goods brought into India from a place outside India, except goods cleared for home consumption. Therefore, 'Drone' is not goods coming the exceptional category of home consumption. That apart, the term 'restricted goods' is not defined under the Customs Act, however, prohibited goods' is defined under Sec.2(33) to mean any goods the import or export of which is subject to any prohibition under the Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be "imported or exported" have been complied with (emphasis supplied). In my considered opinion, the provisions thereunder is a clear and vibrant indicator to show that, in respect of import of goods requiring prior permission, W.P.(C) No.2289 of 2017 12 permission is a necessary corollary to classify the goods non prohibited, which thus means, the goods are classified, 'prohibited' and 'non-prohibited' in accordance with the tenor and terms of the law in force. That apart, provisions of Sec.3 of the Foreign Trade (Development and Regulation) Act, 1992, make the situation abundantly clear that, whenever there is a restriction created by an order published in the official Gazette, it shall be deemed to be goods prohibited under Sec.11 of the Customs Act. Again, sub-section 4 of Sec.3 of Act, 1992 specifies that the provisions of Act 1992 is not in derogation of other laws in vogue.
15. Taking into account the totality of the circumstances and the law involved in the subject discussed above, I am of the definite opinion that petitioner is not entitled for a direction to release the goods detained under Ext.P1 receipt, provisionally to the petitioner. But, I make it clear, dismissal of this writ petition will not stand in the way of considering Ext.P2 application submitted by the petitioner, if and when situation demands.
W.P.(C) No.2289 of 2017 13
The writ petition is dismissed subject to the above observation.
Sd/-
SHAJI P. CHALY JUDGE //true copy// P.S. to Judge St/-
02.02.2017