The Hon’ble Punjab and Haryana High Court in M/s Prenda Creations Private v. Union of India and Ors [CWP No. 9301 of 2023 dated April 04, 2025] held that the respondents wrongfully and illegally withheld perishable food items, namely Kiwi fruit, despite repeated directions for release, causing the goods to deteriorate and become unfit for consumption, and directed refund of customs duty along with interest and awarded compensation to be recovered from the erring officers.
Facts:
M/s Prenda Creations Private (“the Petitioner”), an importer of food items, imported a consignment of Kiwi fruit in four refrigerated containers from its foreign supplier, R.A. Logistics & Distribution LLC, Dubai, UAE, for delivery at ICD GRFL, Ludhiana.
Union of India & Ors (“the Respondent”), including Customs officials and the shipping company, refused to permit the Petitioner to file a manual bill of entry under Section 46 of the Customs Act, 1962 (“the Customs Act”), and failed to amend the Import General Manifest (IGM) to reflect Ludhiana as the final place of delivery, despite the Bill of Lading specifying the same.
The Petitioner contended that the goods were perishable with limited shelf life, accompanied by complete export documentation, and that the failure to amend the IGM and permit manual bill of entry resulted in delay, causing the goods to rot. The Petitioner argued that under Section 30(3) of the Act, the Proper Officer was empowered to amend the IGM.
The Respondent contended that amendment to the IGM could only be made at the request of the shipping line as per the Circular dated April 11, 2017, and that doubts existed regarding the origin of the Kiwi fruit, which they suspected to be from Iran instead of Chile as declared.
Aggrieved by the Respondent’s inaction, shifting of goods to Saurashtra Freight Pvt. Ltd. without rail connectivity, non-compliance with Court orders, and prolonged detention despite clearances from FSSAI and Plant Quarantine Department, the Petitioner approached the Court by way of a writ petition under Article 226 of the Constitution of India, seeking directions for release of goods and compensation for loss.
Issue:
Whether the Respondents acted illegally in withholding and delaying the release of perishable goods despite amendment of the Import General Manifest under Section 30(3) of the Customs Act, 1962 was permissible?
Held:
The Hon’ble Punjab and Haryana High Court in CWP No. 9301 of 2023 held as under:
- Observed that, the Petitioner’s clearly mentioned ICD GRFL Ludhiana as the final place of delivery, yet the IGM was wrongly filed at Mundra Port, contrary to Section 30 of the Customs Act, 1962.
- Noted that, under Section 30(3), the Proper Officer could have amended the IGM upon satisfaction that no fraudulent intention existed, but the Respondents wrongly relied solely on the CBIC Circular dated April 11, 2017 to deny amendment.
- Observed that, despite interim orders passed by the court permitting transfer and manual bill of entry, the Respondents and the shipping line delayed compliance, even shifting goods to a terminal without rail connectivity.
- Noted that, NOC from FSSAI and Plant Quarantine Department confirming the goods were fit for human consumption was ignored by the Respondents, and further detention was caused on the pretext of verifying the country of origin.
- Held that, due to delay of more than three months, the entire 89,420 kg consignment was rendered unfit for consumption, as per inspection and certificate placed on record.
- Further directed that, Customs duty paid on the Kiwi fruit be refunded along with interest at 6% p.a, and Compensation of ₹50 lakhs be paid to the Petitioner, recoverable from the erring officers; and that the Authorities must formulate policy ensuring coordinated action by testing labs, shipping companies, and Customs to avoid such delays in perishable imports.
Our Comments:
This case underscores the statutory obligation under Section 30(3) of the Customs Act, 1962 for the Proper Officer to permit amendment of the IGM when no fraudulent intent is evident. The Court found that reliance solely on CBIC Circular dated April 11, 2017, which prescribes amendment only at the behest of the shipping line, was misplaced where statutory powers under Section 30(3) could override procedural limitations in a circular.
In the case of Rajesh Arora v. Collector of Customs [1998 (101) ELT 246 (Del.)], the Hon’ble Delhi High Court held that where the Customs Department had effective control and custody over the goods, even if physically placed at a third party’s premises, the same amounted to “seizure” under Section 110 of the Customs Act, particularly when the importer was deprived of possession and use, as evidenced by the surrender of keys and undertaking not to use the goods without departmental permission. The present case is similar insofar as the goods, though not physically in the Customs warehouse, were under the control and custody of the respondents due to their own procedural delays and non-compliance with Court orders, ultimately causing the perishable goods to deteriorate.
However, unlike in the case of Rajesh Arora, where the relief centred around unlawful detention, here the core issue concerns refund of duty for goods rendered unfit for consumption. Also in this case the court held that, Section 26A(3) of the Act does not apply because the loss did not arise from the importer’s voluntary abandonment, destruction, or export of goods within the prescribed time; rather, it resulted from the respondents’ own acts in obstructing release despite judicial directions. To interpret Section 26A(3) rigidly in such circumstances would permit the Customs Department to unjustly enrich itself at the cost of a bona fide importer, contrary to the equitable principles that should govern refund in cases of departmental fault.
Relevant Provisions:
Section 30(3), Customs Act, 1962
“30. Delivery of arrival manifest or import manifest or import report:-
If the proper officer is satisfied that the Import Manifest or Import Report is in any way incorrect or incomplete, and there was no fraudulent intention, he may permit it to be amended or supplemented.”
Section 46, Customs Act, 1962
“46. Entry of goods on importation.
(1) The importer of any goods, other than goods intended for transit or transhipment, shall make entry thereof by presenting electronically on the customs automated system to the proper officer a bill of entry for home consumption or warehousing in such form and manner as may be prescribed:
Provided that the Principal Commissioner of Customs or Commissioner of Customs may, in cases where it is not feasible to make entry by presenting electronically on the customs automated system, allow an entry to be presented in any other manner:
Provided further that if the importer makes and subscribes to a declaration before the proper officer, to the effect that he is unable for want of full information to furnish all the particulars of the goods required under this sub-section, the proper officer may, pending the production of such information, permit him, previous to the entry thereof
(a) to examine the goods in the presence of an officer of customs, or
(b) to deposit the goods in a public warehouse appointed under section 57 without warehousing the same.…”
CLICK HERE FOR OFFICIAL JUDGMENT COPY
(Author can be reached at info@a2ztaxcorp.com)
DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose and for the reader’s personal non-commercial use. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon. Further, no portion of our article or newsletter should be used for any purpose(s) unless authorized in writing and we reserve a legal right for any infringement on usage of our article or newsletter without prior permission.
