Export of garlic by petitioner without licence.

All the petitioners have imported fresh garlic which is a restricted category. The import has been made without obtaining due license and therefore, they knew that the goods were liable to be confiscated. Yet they imported the goods without obtaining license expecting to be given the option to pay fine in lieu of confiscation under Section 125 of the Customs Act, 1962. A public notice No.222/02 dated 20-06-2002 was issued by the Commissioner of Customs to the effect that import of fresh garlic will not be allowed henceforth and if any fresh garlic is imported without a license the same will have to be re-exported. From the covering letter, dated Nil, issued by the Joint Commissioner of Customs it is seen that the Ministry of Agriculture had conveyed its opinion that fresh garlic should not be imported without license and therefore, the instructions have been issued which is required to be observed scrupulously. On 25-06-2002, letter No.446/9/2002 was issued by the Central Board of Indirect Taxes to the Customs Authorities informing them that the Director General of Foreign Trade had after reviewing the matter in consultation with the Ministry of Agriculture decided not to allow clearance of fresh garlic imported without a license for home consumption after imposition of fine or penalty and that such imported garlic should be re-exported forthwith. The petitioners imported garlic despite the public notice.

2. The Commissioner of Customs directed re-export of the cargo after imposing a penalty under Section 112 (a) of customs Act. The order reads thus:

"I find no option but only to allow the importers to re-export the goods in terms of a public notice dated ..."

3. Section 125 of the Customs Act reads as follows:

Option to pay fine in lieu of confiscation

(1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods 1[or, where such owner is not known, the person from whose possession or custody such goods have been seized,] an option to pay in lieu of confiscation such fine as the said officer thinks fit;

PROVIDED that, without prejudice to the provisions of the proviso to sub-section (2) of section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon.

1[(2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1), the owner of such goods or the person referred to in sub-section (1) shall, in addition, be liable to any duty and charges payable in respect of such goods.]

The construction of this section is quite crucial. When the petitions for stay came up, by consent the main writ petitions were taken up.

4. The learned Senior Counsel for the petitioners in W.P.No.34064 and 34065 of 2002 made her submissions both orally and also submitted written arguments. This was adopted and supplemented by all the learned counsel appearing for the petitioners in the other writ petitions. Their submissions were as follows:

(a) The Exim policy determines whether goods are free or prohibited absolutely or restricted. Fresh garlic falls under the category of 'restricted' as against 'free' or 'prohibited'. When goods are imported contrary to any prohibition imposed by law they are liable to be confiscated under Section 111 (d) of the Customs Act, however, the Customs Officer who is the Adjudicating Officer under Section 125 of the Customs Act must give the option to pay fine in lieu of confiscation and that where the goods that are imported are restricted items then granting option of payment of fine in lieu of confiscation is mandatory on the part of the officer. This right to exercise option cannot be restricted by executive orders and the right of the importers to pay the fine and re