Legal principle

Where Customs authorities, despite judicial orders, fail to act promptly and perishable imported goods are destroyed in their custody, the importer is entitled to refund of the customs duty with interest and to public-law compensation under Article 226, recoverable from the erring officers.

Court decision

The writ petition was allowed in favour of the importer. The Court directed the respondents to release the amount paid as customs duty on the Kiwi along with interest at 6% per annum, and awarded conservative compensation of Rs. 50 lakhs for the 89,420 kg of Kiwi destroyed on account of delay in release, the amount to be recovered from the erring officers. The Court also directed that a policy be formulated so that testing labs, shipping companies and Customs Authorities work in tandem, and observed the case exemplified red-tapism.

Facts

M/s Prenda Creations Pvt Ltd, a Ludhiana-based importer of food items, imported Kiwi fruit in four refrigerated containers from R.A. Logistics & Distribution LLC, Dubai, under Bill of Lading dated 16.04.2023 showing the final place of delivery as ICD GRFL, Ludhiana. The shipping line (respondent No. 5, M/s Transliner Maritime Pvt. Ltd.) nonetheless filed the Import General Manifest at Mundra port declaring Mundra as the final place of delivery, and the goods were discharged at Mundra. Because the online EDI system links the bill of entry to the IGM, the petitioner could not file a bill of entry under Section 46 at ICD Ludhiana, and its requests for permission to file a manual bill of entry (per the Circulars dated 04.05.2011 and 12.05.2011) and for amendment of the IGM were refused, Customs stating that amendment could be executed only by the shipping line. The petitioner therefore sought a writ of Certiorari/Mandamus for cancellation of IGM No. 2341578 dated 22.04.2023 and permission to file a manual bill of entry at ICD Ludhiana for the highly perishable Kiwi. Despite several interim orders of the Court permitting transfer of the goods and manual filing (and eventual amendment of the IGM on 30/31.05.2023), the respondents did not act promptly and the entire consignment of 89,420 kg of Kiwi perished.

Key provisions

• Section 30, Customs Act, 1962 — Delivery of arrival manifest or import manifest or import report
• Section 46, Customs Act, 1962 — Entry of goods on importation
• Section 110, Customs Act, 1962 — Seizure of goods, documents and things
• Section 141, Customs Act, 1962 — Conveyances and goods in a customs area subject to control of officers of customs