1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. CIVIL WRIT PETITION NO.713/08 Rajsthan Small Industries Corporation vs. Union of India & Ors. Date of order : 15/2/2008. HON'BLE MR.JUSTICE MOHAMMAD RAFIQ Shri R.P. Garg for the petitioner. Shri K.K. Sharma, Asstt. Solicitor General of India. Shri Alok Sharma for the respondent no.5. ****** REPORTABLE This writ petition has been filed challenging the order dated 2.1.2008 and 8/10.1.2008. By the first order, the Assistant Commissioner of Customs, Air Cargo Complex, Sanganer, Jaipur in compliance with the order passed by the Central Board of Excise & Customs dated 18.12.2007 directed that precious cargo imported to and exported from Jaipur City would be cleared at the newly created Air Cargo Complex situated at Jaipur Gemstone Exchange, 15-C, Diggi House, Ram Singh Road, Near Maharani College, Jaipur. It was directed that in case any importer does not require the facility of customs clearance with the new Custodian, he may indicate so in the declaration filed 2 with the department and obtain clearance from Air Cargo Complex, situated at Airport, Jaipur and get the same cleared at airport itself. However, such importer would have to fulfill all the requirements of customs and import control before clearance of goods. Subsequent order dated 8/10.01.2008 contains the procedure which was evolved in the joint meeting of the both the Custodians at Air Cargo Complexes at Jaipur i.e. respondent no.5-M/s. Jaipur Gemstone Exchange and the petitioner RAJSICO. While the petitioner was appointed as Custodian of the imported goods by the Commissioner, Customs Department, Jaipur under Section 45(1) of the Customs Act, 1962, the Commissioner in his discretion subsequently by order dated 24.4.2007 also appointed Jaipur Gemstone Exchange as Custodian at Air Cargo Complex, Sanganer, Jaipur for import and export cargo of diamonds, precious and semi-precious stones, pearls, jewellery made of gold or any other precious metal, with or without studding, industrial diamonds (including powders), both natural and synthetic, synthetic stones and such other similar 3 items as may be specified from time to time. Procedure that was evolved by the Customs Department pursuant to deliberations which took place in the meeting jointly held with both the custodians referred to above, has given rise to the cause of grievance and consequently to the present writ petition. Shri R.P. Garg, learned counsel for the petitioner has argued that the respondent Customs Department has arbitrarily created a monopoly in favour of respondent no.5- Jaipur Gemstone Exchange for dealing with precious items. The petitioner was efficiently working as Custodian of entire cargo including the precious items since 1979. There was no occasion therefore for the Customs Department to appoint another Custodian and that too by creating monopoly in its favour in so far as the precious items are concerned. Learned counsel while referring to declaration submitted by number of importers at Annexure-9 to 33, argued that they have desired their cargo to be cleared only through the petitioner and not through respondent no.5. Monopoly has been created in favour of respondent no.5 with a 4 mala fide intention only with a view to depriving the petitioner of his legitimate rights to receive the imported goods at the air cargo complex itself. It is argued that the compulsion for the importers to first take their goods to the warehouse of respondent no.5 and then get it shifted to the warehouse of petitioner in terms of arrangement made in clause 5 of the procedure evolved in order dated 8/10.01.08 is wholly arbitrary and unreasonable. It would create enormous amount of inconvenience and would deprive the petitioner of the business. Shri K.K. Sharma, learned Assistant Solicitor General appearing for Union of India and the Customs Department and Shri Alok Sharma appearing for respondent no.5 Jaipur Gemstone Exchange, another Custodian, have opposed the writ petition. Shri K.K. Sharma, learned Assistant Solicitor General has argued that the joint meeting of both the Custodians was held on 8.1.2008 and as per the deliberations which took place in that meeting, a procedure was evolved according to which it was decided 5 that imported goods shall be first taken to the warehouse of the Custodian respondent no.5 at the airport itself and segregation of cargo shall take place in their warehouse and thereafter the precious cargo would be handed over to the Custodian Jaipur Gemstone Exchange and cargo other than precious, to the Custodian-RAJSICO, namely the petitioner. Imported Goods Manifesto (I.G.M.) is required to be signed by all the agencies present at the time, i.e. its Carrier-namely the concerned airlines, respective Custodians and Customs Inspector. Importers can file bill of entry with the respondent no.5 Custodian. In case however any importer does not require clearance facility with the respondent no.5, he may file a declaration indicating so with the Customs at Air Cargo Complex, Sanganer. Such precious cargo shall be escorted from the warehouse of Jaipur Gemstone to the warehouse of the petitioner RAJSICO in the presence of Inspector of Customs and a note to this effect will be made in the register maintained with the Custodian Jaipur Gemstone Exchange namely the respondent 6 no.5. Filing of bill of entry for clearance of precious cargo at Airport, Sanganer is thus allowed to be made only after following this procedure. Shri K.K. Sharma clarifies that in fact the apprehension of the petitioner that monopoly has been created in favour of respondent no.5 is more illusory than real. In spite of the fact that the Commissioner of Customs, Jaipur appointed respondent no.5 as the Custodian solely for precious cargo vide order dated 24.4.2007, their request for clearance of the precious goods through them only was not accepted as is evident from the letter dated 10.8.2007 (Annexure-4) addressed by Joint Commissioner of Customs to the respondent no.5. Shri K.K. Sharma further clarified that such of the importers who do not require the clearance facility through respondent no.5 Custodian, but rather prefers to have it cleared through petitioner-Custodian, may in advance file a declaration saying so with the Customs Department at the Air Cargo Complex itself. The precious cargo which is initially taken to warehouse of respondent no.5-Custodian, is then shifted from their 7 warehouse to the warehouse of RAJSICO for which they are not charged anything. It is therefore submitted that argument that a monopoly has been created is wholly unfounded. Shri K.K. Sharma further argued that when the Collector of Customs in exercise of powers conferred u/s. 45(1) of the Customs Act has the power to appoint one Custodian, he can by invoking the same powers appoint another one as well which is what has been done in the present case. It is argued that for the same reason the petitioner also cannot insist upon a monopoly being created in his favour. The Commissioner of Customs decided to appoint respondent no.5 as the Custodian for precious cargo upon consideration of the practical aspects of the matter but in that also, an exception has been carved out for such of the importers who do not want the clearance facility with the respondent no.5- Custodian. It is therefore denied that there was any arbitrariness or mala fide on the part of the customs authorities. He, therefore, prayed that the writ petition be dismissed. 8 Shri Alok Sharma, learned counsel for the respondent no.5 has however taken a somewhat different stand than the Customs Department. He has argued that the respondent no.5 was appointed as Custodian by the Commissioner of Customs solely for handing the precious cargo and having done so, the Customs Department could not thereafter dilute the arrangement. Referring to notification no.2/2007 dated 24.4.2007, whereby the respondent no.5 was appointed as Custodian for precious cargo, Shri Alok Sharma argued that for items such as diamonds, precious and semi-precious stones, pearls, jewellery made of gold or any other precious metal, with or without studding, industrial diamonds (including powders), both natural and synthetic, synthetic stones and such other similar items, the respondent no.5 was purposely appointed as the sole Custodian at the Air Cargo Complex itself. No exception thereafter could be made at the level of Assistant Commissioner by passing any order like the one dated 8/10.1.2007. While reserving his right to question the correctness of this order, Shri Alok Sharma 9 further argued that the Commissioner of Customs was well within his right to device an arrangement by which he decided to have a fresh Custodian solely for precious cargo. Section 45(1) of the Customs Act, 1962 is an enabling power which he can exercise at multiple number of times. Shri Alok Sharma, therefore, submitted that the petition itself is liable to be dismissed because the petiotoner being appointee of Customs Department has no locus to challenge the appointment of respondent no.5. The writ petition be therefore dismissed. I have given my thoughtful consideration to the arguments aforesaid and perused the impugned order. The first and foremost aspect that needs to be noticed is that though the petitioner has questioned the correctness of the procedure devised on the basis of deliberations held on 8.1.2008, but he has not challenged the appointment of respondent no.5 as the Custodian for precious cargo. The apprehension of the petitioner that the importers would have a certain kind of compulsion to route their goods through the 10 godowns of respondent no.5 in Jaipur City for the purpose of clearance, does not appear to be well founded. Careful analysis of the impugned order dated 8/10.1.2008 would make it clear that imported goods unloaded from the aircraft are taken to the warehouse of the Custodian respondent no.5 merely for the purpose of segregation. It would be appropriate to reproduce the procedure referred to in order dated 8/10.1.2008 in extenso, which is as follows: “Following procedure have been finalized in respect of Import Cargo arriving at Jaipur Airport;- 1.Imported goods on arrival shall be escorted from Air Craft to the warehouse of the Custodian JGE at the Airport by the Inspector of Customs. 2.Segregation of cargo shall be taken place in the warehouse and thereafter, precious cargo will be handed over to Custodian JGE and cargo other than precious to the custodian RAJSICO. 3.The IGM is to be signed by all agencies at the time i.e. the Carrier (Indian Airlines, Jet etc.), respective Custodian and Custom Inspector. Discrepancy, if any, in weight shall be noted by the respective Custodian, Carrier and Inspector of Custom. 11 Appropriate entry shall be made in Registers being maintained by the respective Custodian for the cargo received by them. 4.Cargo pertaining to the units situated in SEZ, Sitapura will be handed over to the Rajsico, as the jurisdictional authoirity over such cargo is the Development Commissioner, SEZ. 5.Importers can file Bill of Entry for precious cargo at JGE. In case any importer does not require the clearance facility at JGE he may file a declaration saying so with the Customs at Air Cargo Complex, Sanganer, Jaipur. Such precious cargo shall be escorted from the warehouse of JGE at the Airport to the warehouse of RAJSICO, in the presence of Inspector of Customs and a note to that effect will be made in the Register maintained with Custodian JGE. Handover procedure is then followed with the Custodian RAJSICO. Filing of Bills of Entry for clearance of precious cargos at Air Cargo, Sanganer shall be allowed only after following this procedure. 6.The precious cargo handed over to JGE shall be transported to their ware house at Jaipur Gemstone Exchange, 15- C, Diggi House, Ram Singh Road, Behind Hotel Meru Palace, Jaipur. The loading and unloading of this cargo will also be supervised by the Inspector of 12 Customs at both the points. Necessary procedure for clearance of goods at JGE will be followed as per Customs Act, 1962 and various Rules & Regulation.” In view of clause 5, supra, it would be evident that in case where the importer does not wish to avail the clearance facility with the respondent no.5-Custodian, he is free to file in advance a declaration to this effect with the Customs at the Airport Cargo, Sanganer. Precious cargo imported by such importers according to aforesaid procedure would then be shifted from the warehouse of respondent no.5 Custodian at the airport itself to the warehouse of RAJSICO in the presence of Inspector of Customs and a note to this effect would be made in the register maintained by the respondent no.5. I am, therefore, not persuaded to uphold the argument of the petitioner that a monopoly has been created in favour of respondent no.5 and that in spite of the importer willing to avail of clearance facility with the petitioner- Custodian, they are under any kind of compulsion to still deal with respondent 13 no.5. In view of the clarifications made by Shri K.K. Sharma, learned Assistant Solicitor General that goods are taken to the warehouse of respondent no.5 at the airport and not in Jaipur City and that too only for the purpose of segregation, for which nothing is charged, I hardly see any substance in the argument that the system has been devised only with a view to favouring respondent no.5. In any case, setting up of a cargo exclusively for precious and semi precious stones, diamonds, pearls, jewellery and other precious items etc. is a matter of policy for the Customs Commissioner to decide and this Court cannot in exercise of its power of judicial review under Article 226 of the Constitution regulate the working of the Customs Department in that regard. As rightly argued, the power to appoint Custodian u/s. 45 of the Customs Act is an enabling power and it can be invoked by the Commissioner of Customs for multiple number of times. When the Commissioner has the power to appoint one Custodian, he can by invoking the same power also appoint another one. The 14 Commissioner of Customs while making appointment of the Custodian in exercise of powers conferred upon him u/s 45, can also subject such appointment to certain conditions by way of regulatory measures consistent with the provisions contained in Chapter-VIII of the Customs Act, especially Section 56 thereof, which may be varied by him from time to time though on valid and relevant considerations. Insistence of the petitioner, therefore, that imported cargo, even the precious ones, should be first taken to their warehouse even for the purpose of segregation cannot be therefore accepted. In view of the above discussion, I do not find any reason to interfere with the order dated 2.1.2008 (Annexure-6) and the order dated 08/10.01.2008 (Annexure-8), which are adjudged valid. The writ petition is therefore dismissed though with no order as to costs. (MOHAMMAD RAFIQ), J. RS/