JUDGMENT
1. In this petition, two orders passed by the
Customs authorities under Section 111(d) of the
Customs Act read with Section 3 of the Imports and
Exports (Control) Act, 1947 seeking to confiscate the
imported Oxytetracycline Hydrochloride have been
challenged. By the impugned orders, the Petitioners
have been given the option to redeem the confiscated
goods on payment of redemption fine of Rs.1,65,000/
( Rs.1,50,000/ + Rs.15,000/).
2. The facts relevant for the present petition
are as follows:-
The Petitioners inter alia manufacture
Oxytetracycline capsule for which Oxytetracycline
Hydrochloride is a raw material. On or about the
3rd February, 1989, the Petitioners entered into a
contract with a foreign supplier for import of 1000
kgs. of Oxytetracycline Hydrochloride (the said
goods for short). In April 1989, the foreign
supplier airshipped 100 kgs of the said goods and on
arrival of the said goods, the Petitioners filed a
bill of entry on 6/4/1989, seeking clearance of the
said goods as OGL item, being raw material (not
covered under Appendix 2,3,5 and 8) required for the
manufacture of the drug Oxytetracycline Capsule.
Alternatively the Petitioners claimed clearance of
the said goods as drug intermediate under the import
licence bearing No. 3192069 dated 27/11/1987 which
licence was acquired by the Petitioner from the
market as it was freely transferable.
For all the aforesaid reasons, we hold that
the Custom Authorities were justified in confiscating
the goods imported by the Petitioners as the
importation was in violation of the import policy.
The Petitioners have exercised option of redeeming
the goods on payment of redemption fine and have
obtained clearance of the goods under the interim
orders of this Court, by furnishing bank guarantee to
the extent of redemption fine levied. As we have
upheld the order of confiscation, the Respondents
shall be entitled to recover the amount of redemption
fine with interest @ 12% p.a. from the date of
clearance of the goods till date.
Accordingly, the petition fails. Rule stands
discharged. The Respondents are at liberty to encash
the bank guarantees for the sum of Rs.1,65,000/
furnished by the Petitioners. The Petitioners shall
pay to the Respondents, interest on the said sum of
Rs.1,65,000/- from the date of clearance of goods
till date @ 12% p.a. by 31.12.2002. If the
Petitioners fail to pay the said amount of interest
by 31.12.2002, then the said amount of interest shall
be recoverable from the Petitioners with interest
@18% p.a. from 1st January 2003 till the date of
recovery.
The petition stands disposed of accordingly.
However, there will be no order as to costs.
At this stage the learned Counsel appearing
for the Petitioner requested to issue directions to
the Revenue not to enforce the bank guarantee for the
period of eight weeks. Accordingly, we direct the
Revenue not to encash the bank guarantee for the
period of eight weeks from today.
Certified copy expedited.