Gujarat High Court
Akin Chemicals Pvt. Ltd vs Director General Of Foreign Trade on 1 February, 2024
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/8260/2022 ORDER DATED: 01/02/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 8260 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 8265 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 8289 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 8370 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 8395 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 8626 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 8647 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 9092 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 9093 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 9094 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 9095 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 9096 of 2022
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AKIN CHEMICALS PVT. LTD.
Versus
DIRECTOR GENERAL OF FOREIGN TRADE
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Appearance:
MS. DIMPLE K. GOHIL(7451) for the Petitioner(s) No. 1,2
GOVERNMENT PLEADER for the Respondent(s) No. 1,2,3
MR HARSHEEL D SHUKLA(6158) for the Respondent(s) No. 1
MS HETVI H SANCHETI(5618) for the Respondent(s) No. 2
PRIYANK P LODHA(7852) for the Respondent(s) No. 3
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
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NEUTRAL CITATION
C/SCA/8260/2022 ORDER DATED: 01/02/2024
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Date : 01/02/2024
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. These petitions are filed challenging the action of the respondent-authority requiring the petitioners to submit the BIS certificate license for assessment of the Bill of Entries filed by the petitioners on the ground that mandatory BIS Certificate license is not obtained in respect of the goods being Hexane imported by the petitioners as per the solvent control order in terms of which, the Hexane, Food Grade had to meet BIS 3470 when employed in extraction of oleaginous material.
2. The petitioners therefore, have prayed for the following reliefs in Special Civil Application No. 8260 of 2022 and similar reliefs are prayed in other petitions: Page 2 of 16 Downloaded on : Tue Feb 06 20:34:59 IST 2024
NEUTRAL CITATION C/SCA/8260/2022 ORDER DATED: 01/02/2024 undefined "a. This Hon'ble Court may issue a writ of Mandamus or a writ in the nature of Mandamus or any other writ, order or direction calling upon respondent No.2 and 3 to forthwith assess and permit deposit of the imported Hexane into customs bonded warehouse against into bond Bills of Entry and/or assess and grant out of charge for home consumption against ex-bond bills of entry, following the procedure of execution of end-use bond for traders along with Legal undertaking for actual user laid down by the Respondent no.2 vide its letter dated 22.11.2019 which practice has been consistently following by the petitioner;
b. This Hon'ble Court may issue a writ of Mandamus or a writ in the nature of Mandamus or any other writ, order or direction calling upon Respondent No.1 to amend Appendix III of ITAC (HS) 2017 Schedule I Import Policy by correcting entry at Sr No. 52 thereof, which erroneously suggest that import of Hexane (Food Grade) is subject to mandatory BIS 3470;
C. This Hon'ble Court may be
pleased to issue a Writ of
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NEUTRAL CITATION
C/SCA/8260/2022 ORDER DATED: 01/02/2024
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Declaration or any other
appropriate Writ, order or
direction int eh nature of a Writ of Declaration declaring that mandatory BIS certification in terms of the General Notes regarding Import Policy of ITC (HS) 2017 (as amended) is inapplicable in the case of import of Hexane, as the Solvent Control Order, which supposedly mandated such a requirement has been repealed with effect from 04.08.2011 as also the said Solvent Control Order did not mandate that all Hexane, irrespective of the use to which the same are being put to have to meet the specification of BIS 3470;
D. Pending the hearing and final disposal of this petition, the Hon'ble Court be pleased to direct the Respondent No.2 and 3, their subordinates, servants and agents, to assess the Bills of Entry for import of Hexane and permit deposit in the custom bonded warehouse and/or assess and permit clearance for home consumption of Hexane by granting out of charge, following the same procedure laid down by Respondent No.2 vide its letter dated 22.11.2019;
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NEUTRAL CITATION C/SCA/8260/2022 ORDER DATED: 01/02/2024 undefined
e) for ad-interim reliefs in terms of prayer (c) above;
(f) for costs.
3. This Court [Coram: Hon'ble Mr. Justice J.B.Pardiwala, as His Lordships was then and Hon'ble Ms. Justice Nisha M. Thakore] passed the order on 05.05.2022:
"1. Since the issues raised in all the captioned writ applications are the same, those were taken up for hearing analogously and a common interim order is being passed.
2. We have heard Mr. Mihir Joshi, the learned senior counsel appearing for the writ applicants, Mr. Priyank P. Lodha, the learned standing counsel appearing for the respondents Nos.2 and 3 respectively and Mr. Nikunt K. Raval, the learned standing counsel appearing for the respondent No.4.
3. On 02.05.2022, this Court passed the following order:
"1. We have heard Mr. Mihir Joshi, the learned Senior Counsel appearing for the writ applicants, Mr. Priyank Lodha, the learned Standing Counsel appearing for the respondents Nos.2 and 3 and Mr. Nikunt Raval, the Page 5 of 16 Downloaded on : Tue Feb 06 20:34:59 IST 2024 NEUTRAL CITATION C/SCA/8260/2022 ORDER DATED: 01/02/2024 undefined learned Standing Counsel appearing for the respondent No.4.
2. At the end of today's hearing, what we have been able to understand is that the writ applicants herein imported in the recent past different consignments of Hexane Liquid Chemical. This Hexane Liquid Chemical can be utilized for Industrial purpose as well as for Food Grade purpose.
3. We are not clear in what manner the Hexane Liquid Chemical is used for the respective purposes. In other words, what is the role of Hexane Liquid Chemical.
4. Mr. Joshi, would submit vehemently that in the past also, the writ applicants had imported huge consignments of Hexane Liquid Chemical for the Industrial purpose and if this very same Hexane Liquid Chemical is to be utilized for Food Grade purpose then some legal formalities are to be completed. The argument of Mr. Joshi is that once the Hexane Liquid Chemical is imported for Industrial purpose, it shall be utilized for Industrial purpose only.
5. The argument of Mr. Priyank Lodha and Mr. Nikunt Raval is that what has been imported in the name of Hexane Liquid Chemical, to be Page 6 of 16 Downloaded on : Tue Feb 06 20:34:59 IST 2024 NEUTRAL CITATION C/SCA/8260/2022 ORDER DATED: 01/02/2024 undefined utilized for Industrial purpose, is actually Hexane Liquid Chemical for Food Grade purpose. The two learned Standing Counsel tried to submit that there are two different products; (1) Hexane Liquid Chemical for Industrial purpose and (2) Hexane Liquid Chemical for the purpose of Food Grade. What has been imported is for Industrial purpose but, when the samples were drawn and sent for analysis, the CRCL, Vadodara, has certified it to be Hexane for the purpose of Food Grade.
6. Our endeavour should be to first understand whether these two products are different or distinct or is it the case that the Hexane Liquid Chemical can be used for Industrial purpose also as well as for Food Grade purpose. If this chemical can be used for both the purpose as aforesaid then the writ applicants undertake that they will use it only for the Industrial purpose.
7. We need to understand further on what basis the CRCL has said that the samples analyzed are not Hexane Liquid Chemical meant for Industrial purpose but, it is for Food Grade purpose. In this regard, we want CRCL to file a affidavit through a responsible officer along with the necessary test reports.Page 7 of 16 Downloaded on : Tue Feb 06 20:34:59 IST 2024
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8. Let these matters come up on 05.05.2022 on top of the Board. One set of the entire reply along with the documents shall be furnished by
04.05.2022 to the learned advocate appearing for the writ applicants.
9. Notify these matters as item No.1 on 05.05.2022."
4. In response to the aforesaid order passed by this Court, an affidavit-in- reply has been filed on behalf of the respondents Nos.2 and 3 respectively. An affidavit has also been filed by one Dr. Manoj Nagariya, serving as the Chemical Examiner Gr.II at the Central Excise & Customs Laboratory, Vadodara in due deference to the direction issued by this Court. The affidavit of Dr. Manon Nagariya reads thus:
"(1) 1, Dr. Manon Nagariya, working as Chemical Examiner Gr. II at Central Excise & Customs Laboratory, Vadodara, having my office at Vadodara , on behalf of the answering Respondents, do hereby solemnly affirm and state as under:
(2) I have perused the order dated 2/5/2022 passed by this Hon'ble Court in Special Civil Application No. 8260 of 2022 and other allied matters, wherein this Hon'ble Court has directed CRCL, Vadodara to file Page 8 of 16 Downloaded on : Tue Feb 06 20:34:59 IST 2024 NEUTRAL CITATION C/SCA/8260/2022 ORDER DATED: 01/02/2024 undefined an affidavit along with test reports and in furtherance of the same, I am filing this Affidavit.
(3) It is submitted that we were in receipt of letters from the Office of the Commissioner of Customs, Kandla, for testing of samples in respect of import consignments of NHexane covered under various bills of entry. In furtherance to the same, on receipt of the samples, we had conducted various tests with respect to the characteristics as are stipulated as per Indian Standard 3470:2017.
(4) It is submitted that as per the results of the tests, the samples provided were meeting with all the characteristics stipulated as per Indian Standard 3470:2017 and therefore, with respect to the samples it was opined that the parameters were meeting the requirement for Heaxane, Food Grade as per IS 3470:2017. Copy of two such reports with respect to the Bills of entries filed by the present Petitioner is annexed herewith and marked as Annexure I (colly.) to this affidavit.
(5) I submit that this affidavit is filed in furtherance of the direction of this Hon'ble Court.
Liberty may be granted to file any Page 9 of 16 Downloaded on : Tue Feb 06 20:34:59 IST 2024 NEUTRAL CITATION C/SCA/8260/2022 ORDER DATED: 01/02/2024 undefined further / additional affidavit, if required. Solemnly affirmed, on oath on this 04 th day of May, 2022 at Vadodara."
5. According to Dr. Manoj Nagariya, the result of the tests carried out revealed all the characteristics stipulated in accordance with the Indian standard 3470 : 2017 and in such circumstances, the laboratory has reached to the conclusion that the parameters meet with the requirements for Hexane, Food Grade. The apprehension on the part of the respondents is that although Hexane was imported for the purpose of industrial use, yet it could be diverted for the purpose of Food Grade. It is not that the product imported cannot be used for industrial purpose. It can be used for industrial purpose, but in view of the specific report of the laboratory, it could be said that keeping in mind the DGFT, policy, what has been imported is Hexane Food Grade.
6. We should not overlook the fact that there are 7 importers before us. The total value of the entire consignment comes to around Rs. 240 Cr. The total quantity of the Hexane, which has not been processed till this date comes to around 27,000 Metric Tones.
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7. We are of the view that we should pass an interim order for release of the consignment subject to the certain terms and conditions:
(i) The writ applicants shall ensure that the Hexane, which they have imported shall be used only for the industrial purpose.
(ii) The writ applicants shall undertake to allow the Customs Department to inspect the books and records as well as the actual use of the Hexane as and when required.
(iii) The writ applicants shall submit a certificate from the Statutory Auditor within 3 months to the effect that the goods have been consumed in the factory in the manufacturing process.
(iv) The breach of any of the aforesaid conditions would entail action under the Customs Act, 1962.
(v) The writ applicants shall also execute the end-use bond for traders.
(vi) The writ applicants shall also execute legal undertaking for actual user,
8. In view of the aforesaid, we direct the respondents Nos.2 and 3 respectively to assess the bills of Page 11 of 16 Downloaded on : Tue Feb 06 20:34:59 IST 2024 NEUTRAL CITATION C/SCA/8260/2022 ORDER DATED: 01/02/2024 undefined entry for import of Hexane and permit clearance for home consumption of Hexane or for warehousing, as the case may be, subject to the aforesaid terms and conditions. It goes without saying that this interim arrangement shall be subject to the final outcome of the writ applications.
Post this matter on 03.08.2022."
4. In view of the above order, the petitioners have furnished the end use bonds and the legal undertaking for actual user for provisional release of the import of Hexane.
5. When these matters are taken up for hearing today, learned Senior Standing Counsel Ms. Hetvi Sancheti for the respondents submitted that by Notification No. 24/2015-2020 dated 04.08.2022, the existing policy condition that import of Hexane, Food Grade must confirmed to BIS Page 12 of 16 Downloaded on : Tue Feb 06 20:34:59 IST 2024 NEUTRAL CITATION C/SCA/8260/2022 ORDER DATED: 01/02/2024 undefined 3470 for HS Code No. 29021100 is deleted. Copy of the said notification is placed on record. It was therefore submitted that "Hexane, Food Grade" at Sr No. 52 of Appendix III to Schedule-I- Import Policy ITC (HS) 2022 is removed from the list of 'Items under mandatory BIS certification' as per the aforesaid notification.
6. Learned advocate Ms. Sancheti has also placed on record communication dated 30.01.2024 addressed to her by the Assistant Commissioner (Legal), Custom House, Kandala, with regard to pending petitions that provisional assessment and out of charge had been granted in all the Bill of Entries mentioned in these petitions as per the interim order dated 05.05.2022 by this Court and as per the Page 13 of 16 Downloaded on : Tue Feb 06 20:34:59 IST 2024 NEUTRAL CITATION C/SCA/8260/2022 ORDER DATED: 01/02/2024 undefined Director of General of Foreign and Trade [DGFT] Notification dated 04.08.2022 prohibiting import of the goods has now been also placed on record and accordingly, the requirement of furnishing of the BIS Certificate stands removed and Bill of Entries are finally assessed without the mandatory BIS Certificate.
7. Learned advocate Mr. Vishal Agrawal appearing for the petitioner in Special Civil Application No. 8260 of 2022 with learned advocate Ms. Dimple Gohil submitted that in view of the Notification dated 04.08.2022 issued by the DGFT, requirement of providing mandatory BIS certificate is now no longer exist and accordingly, the cause for this petition would not survive. It was only Page 14 of 16 Downloaded on : Tue Feb 06 20:34:59 IST 2024 NEUTRAL CITATION C/SCA/8260/2022 ORDER DATED: 01/02/2024 undefined further prayed that pursuant to the order dated 05.05.2022 passed by this Court for provisional release of the goods on furnishing the bond also would not survive and accordingly, the bond furnished by the petitioner is required to be released by the respondent-authority along with the legal undertaking.
8. In view of the above submissions, as the grievance raised in these petitions for submission of the mandatory BIS certificate is no longer survived in view of the Notification No. 24/2015-2020 dated 04.08.2022 issued by the DGFT, the petitions have become infrucutous. The bonds furnished by the petitioners pursuant to the interim order passed by this Court on 05.05.2022 are therefore Page 15 of 16 Downloaded on : Tue Feb 06 20:34:59 IST 2024 NEUTRAL CITATION C/SCA/8260/2022 ORDER DATED: 01/02/2024 undefined required to be released. Accordingly, the bonds furnished by the petitioners are ordered to be released by the respondent- authority and finally assess the Bill of Entries without insisting for mandatory BIS Certificate as per the Notification dated 04.08.2022 issued by the DGFT. The petitions are accordingly disposed of. Notices are discharged. No order as to costs.
(BHARGAV D. KARIA, J) (NIRAL R. MEHTA,J) JYOTI V. JANI Page 16 of 16 Downloaded on : Tue Feb 06 20:34:59 IST 2024