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PETITIONER: UNION OF INDIA & ORS.

       Vs.

RESPONDENT: M/S. SANJEEV WOOLLEN MILLS

DATE OF JUDGMENT:       13/05/1998

BENCH: SUJATA V. MANOHAR, B.N. KIRPAL

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T Mrs. Sujata V. Manohar, J.      Delay condoned.      Leave granted.      Heard both sides.      This is  an appeal  from the judgment  and order of the Delhi High  Court dated 15.7.1996 in Civil Writ Petition No. 3469 of  1994, and  from  an  order  dated  19.3.1997  in  a Contempt Petition  filed in  connection with  the  order  of 15.7.1996, being  Contempt Petition  No. 340  of 1996 before the Delhi High Court.      The   respondent had  filed four Bills of Entry bearing (1)  No.  102619  dated  29.1.1991;  (2)  No.  102815  dated 15.2.1991; (3) No. 102878 dated 20.2.1991 and (4) No. 103166 dated 19.3.1991.  The Bills   of  Entry were  in respect  of Synthetic waste  (soft quality)  imported by the respondent. The respondent  claimed release of the goods free of duty in terms of  valid  import/export  pass-book.  The  goods  were examined and  samples were  drawn for  testing. According to the appellants,  the goods imported were prime fibre and not soft waste.  The value  according  the  appellants  was  not commensurate with the quality of goods under import. Hence a show-cause notice was issued to the respondent in each case.      In the  meanwhile,  since  the  goods  were  not  being released and  were incurring heavy demurrage charges as also container charges,  the respondent  filed a writ petition in the Delhi  High Court  in respect  of two Bills of Entry No. 102815 and  No. 102878  being Civil Writ Petition No. 802 of 1991. In the interim application taken out by the respondent in the  said petition bearing C.M. No. 1587 of 1991, learned counsel for the appellants asked fr further time for testing the samples.  He also  made a statement which is recorded by the High  Court in its order of 3.4.1991, that in case after inspection, the  goods are  found to be synthetic waste, the entire demurrage  and container charges will be borne by the Customs Department  and the  Customs Department  shall issue the requisite certificate.      Thereafter by  another interim  order, the  High  Court also directed  the Principal  Collector  to  adjudicate  the issue  within   a  time  bound  programme.  Accordingly  the

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Collector, by  his order  dated 28.6.1991, decided the issue an d  imposed a  redemption  fine  of  Rs.  11,00,000/-  and personal penalty  of Rs.  1,32,00.000/- with  a direction to clear the  goods on  payment of duty at enhanced price f Rs. 28.14 per  kg. CIF. This was in respect of Bill of Entry No. 102815. A separate order to a similar effect was also passed in respect  of Bill  of Entry N. 102878 imposing a different redemption fine  and penalty.  The respondent filed appeals. In the  meanwhile, because  the Departmental  remedies  were available to  the respondent, the High Court dismissed Civil Writ Petition  No. 802 of 1991 by its order dated 24.7.1991. Ultimately the  dispute went  up to  the Customs, Excise and Gold Control  Appellate Tribunal,  which remanded the matter pertaining to  all the  four Bills of Entry to the Principal Collector, subsequently  designated as  Chief  Commissioner, for a  fresh adjudication.  The Chief  Commissioner, by  his order dated  11.8.1995, ordered the unconditional release of goods under all the four Bills of Entry.      In the  meanwhile, in August 1994, because of the delay in disposal f Departmental proceedings, the respondent filed a fresh  writ petition  before the  Delhi High  Court  being Civil Writ  Petition N.  3469 of  1994 for  release of goods under the  four Bills  of Entry. In the interim applications being C.M.  Nos. 5113  of 1995  and 6401  of  1994,  learned counsel for the respondent stated that the demurrage charges were so  enormous that  they were far in excess of the price of goods  by that  time. He  also drew  the attention of the Court to  the order  of 3rd  of April,  1991 in  Civil  Writ Petition No. 802 of 1991 where, under similar circumstances, the Customs  Department had  stated that  if the  goods were found to  be  synthetic  waste,  the  entire  demurrage  and container charges  would be borne by the Customs Department; and  the   Customs  Department  would  issue  the  requisite detention certificate.  Counsel for  the  appellants  wanted instructions in  that regard.  The interim applications were thereupon adjourned  from 24th  of August,  1995 to  6th  of September, 1995.  The documents  before us  do not  indicate what happened thereafter in the interim applications.      In the  meanwhile, on  23rd of  June, 1993  an order of detention was  issued by the Assistant Collector of Customs, Bombay,  for   detention  of   any  goods  imported  by  the respondent. The detention order was for recovery of a sum of Rs.  1,15,21,249/-   claimed  as  due  and  payable  by  the respondent to the Customs in respect of certain consignments imported by them in 1983. In respect of these consignments a writ petition  had been  filed by  the respondent before the Bombay High  Court being  Writ Petition  No. 2463  of  1983. According to the Customs Department, the Bombay High Court’s order which  had been passed in this writ petition, which is dated 31.7.1991,  was not complied with in so far as payment of interest  was concerned,  by the  respondent.  Hence  the detention order  was made. This detention order was in force when Civil  Writ Petition  No. 3469 of 1994 was filed by the respondent in the Delhi High Court.      Writ Petition  No. 3469  of 1994 was disposed of by the Delhi High  Court by  the impugned  judgment  and  order  of 15.7.1996. Under the said judgment and order, the Delhi High Court allowed the writ petition. The High Court examined the plea of  the  appellants  that  the  goods  were  not  being released because  of the  detention order  of 23.6.1993. The High Court  in  this  connection,  referred  to  an  earlier detention  order   passed  by  the  Customs  authorities  on 14.2.1992  was   withdrawn  on   11.3.1992  by  the  Customs Department. The order of 11.3.1992 withdrawing the detention order of 14.2.1992, in terms, stated that all the arrears of

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revenue in  respect of writ Petition No. 2463 of 1983 as per the terms  and conditions  of the  Bombay High Court’s order dated 31.7.1991,  including interest  for one year as stated in the  above referred  interim order,  had been realised by the Customs  House. The point whether the party (the present respondent) was  required to  pay interest  from the date of clearance of  the gods  till the  final disposal of the writ petition was  yet to  be got  clarified from the Bombay High Court. Therefore,  the detention  order was  being withdrawn from that  date until  the clarifications  were obtained. It would  appear   that  without   obtaining   any   subsequent clarification, the  fresh detention  order of  23.6.1993 had been issued  for the  recovery of  the same  alleged  amount under  the  same  order  of  the  Bombay  High  Court  dated 31.7.1991 in Writ Petition No. 2063 of 1983.      The Delhi High Court, therefore, came to the conclusion that  there  was  no  justification  for  detention  of  the consignments covered  by the  four Bills  of Entry.  It also held  that   when  the   Chief  Commissioner   had   ordered unconditional release  of the  goods on 11.8.1995, there was no justification  for detaining  the goods.  The High  Court also noted the statement earlier made in Civil Writ Petition No.802 of  1991 in  the interim  order dated  3.4.1991;  and directed that  the goods should be released without recovery of  any   demurrage  or   container  charges.   The  present appellants were  directed to issue the requisite certificate in terms  of the  undertaking given  by it  on 3rd of April, 1991 within  a period  of four  weeks so  that  the  present respondent could get the goods released.      Pursuant to  this order,  a detention  certificate  was issued on  15.10.1996.  However,  although    the  Container Corporation of  India had  waived 96%  of their charges, the Shipping Corporation  of India, out of a total amount of Rs. 13,11,00,4.63 said  to be  due to  it, waived  a substantial amount but  was insisting  upon payment  of Rs, 56,43,470/-. Therefore, the  entire demurrage and container chargers were not being  waived. In view, therefore, the contempt petition was taken  out by the respondent being Contempt Petition No. 340 of 1996.      By the  impugned order  of 19.3.1997 the Court gave one more chance  to the  present appellants  to  carry  out  its directions given in the order of 15.7.1996. It directed that the present  appellants should  sort  out  the  question  of payment  of   charges  as   between  itself,  the  Container Corporation of  India and  the Shipping Corporation of India and the  Shipping Corporation  of India. The goods should be released to the respondent within three weeks.      After the  order of  19.3.1997, the present appellants, in compliance  with the directions contained in the said two impugned orders,  addressed a letter to the respondent dated 5.4.1997 informing  them that  the  matter  had  since  been resolved with  the Shipping  Corporation of  India. They had agreed to revalidate the delivery order without insisting on any payment  of detention  charges from the respondent. M/s. Container Corporation  of India  had also agreed to give the delivery  of  the  goods  contained  in  the  38  containers containing the  goods imported  under the said four Bills of Entry, against  a valid  delivery order without insisting on payment of  any demurrage  charges. The letter also recorded that the  Customs authorities  had already released the said goods and hence the respondent could obtain delivery.      Despite  this  letter  the  respondent  has  not  taken delivery of  the goods.  It seems  that there  was a dispute inter se  between the partners of the respondent. In respect of these  disputes a  suit was filed in the Delhi High Court

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by on  of the  partners being  Suit No. 748 of 1997 in which initially on  11.4.197, and again on 27.1.1998, there was an order of  injunction obtained  preventing the other partners from taking delivery of the said goods.      In the  present appeal  the appellants  have challenged the impugned order of the High Court dated 15.7.1996 and the second order  in the contempt petition dated 19.3.1997. They have contended that they should not have been asked to issue a detention  certificate or  to bear demurrage and container detention charges.  Obviously, both  the orders of the Delhi High Court  turn entirely  upon the  special facts  of  this particular case.  It has  noted that  test reports confirmed the  contention   of  the   present  respondent   that   the consignments imported  by them under the four Bills of Entry were of  synthetic waste  soft quality  and not prime fibre. Despite the  test reports,  on one pretext or the other, the goods were  not being  released by  the Customs authorities. The respondent  had complained  of mala fides on the part of the Customs officers concerned with the handling of the four Bills  of   Entry  in  question.  The  respondent  had  even complained to  the then  Finance Minister  about the Customs officers in  question demanding  a large  amount as  illegal gratification for releasing the goods.      Since this was a serious allegation we had directed the appellants to  file an  affidavit to explain what steps they had taken  in connection  with this complaint. They have now filed a  detailed affidavit  setting out  that in accordance with the  directions of the then Hon’ble Finance Minister as recorded on  19.10.1996 by  the Chairman,  Central Board  of Excise and  Customs, action against the officers responsible for  delay   in  clearance   of   consignments   was   being contemplated. The  affidavit sets  out the considerable time taken in  ascertaining the  names of  the officers concerned with the handling of these consignments. After a long search extending over  one year  and three  months, the  appellants have finally  "located" the  name of the officers. They have now called upon the officers to give their explanation.      Looking to  the totality of circumstances pertaining to the import of the consignments under the four Bills of Entry and the   inordinate  delay of  about six  years  for  their release, the  High Court  has  passed  the  impugned  orders directing the  appellants to  issue a  detention certificate and bear the demurrage and container detention charges. They are obviously  orders passed in the special circumstances of the present  case,  and  particularly  the  conduct  of  the Customs authority  in not releasing the goods even after the order of  unconditional release  dated 11.8.1995  passed  by their own  Chief Commissioner.  The conduct  of the  Customs officers concerned  is also  under investigation.  We do not think that  this is  a case  were any  investigation at  our hands is  required. The  apprehension of the appellants that this will constitute a precedent is not justified because it is clearly  an order  which is  meant to  do justice  to the respondent looking  to the totality of circumstances and the conduct of  the appellants. Obviously, for any delay  on the part of  the   respondent in  taking delivery  of the  goods after  5.4.1997,  the  respondent  will  have  to  bear  the consequences. For the period prior to 5.4.1997, however, the order of  the High  Court does  not require any intervention from  us.  The  appellants  shall  file  a  progress  report relating to the departmental inquiry by 30th November, 1998.      The appeal is dismissed with no order as to costs.