Bombay High Court
K Raj And Co vs Union Of India And Ors on 4 November, 2023
Author: G. S. Kulkarni
Bench: G. S. Kulkarni
2023:BHC-AS:34941-DB
Sayyed 930-WP-12757-2023.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.12757 OF 2023
K. Raj And Co. ..Petitioner
Vs.
Union of India And Ors. ..Respondents
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Mr. Prakash Shah a/w Mr. Jas Sanghavi, Mr. Yash Prakash i/by PDS
Legal, for the Petitioner.
Mr. Jitendra B. Mishra a/w. Mr. Umesh Gupta i/by Ms. Sangeeta Yadav
for the Respondents.
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CORAM : G. S. KULKARNI,
JITENDRA JAIN, J.J.
Date : 4th NOVEMBER, 2023.
ORAL JUDGMENT: (Per Jitendra Jain, J.)
. By this Petition under Article 226 of the Constitution of India, the Petitioner has sought for provisional release of the goods under Bill of Entry No.7594166 dated 30th August, 2023.
2. Brief facts are as under :
The Petitioner is engaged in the business of Import of Laboratory Chemicals for more than 5 decades and is holding Import Export Code No.0388027517. The Petitioner has been importing Ethanol Alcohol having purity of 99.9% and in bottles of 500 ml from various countries. The said Ethanol Alcohol has been assessed under 1 of 7 ::: Uploaded on - 10/11/2023 ::: Downloaded on - 24/02/2024 05:13:26 ::: Sayyed 930-WP-12757-2023.doc Customs Tariff Heading (CTH) 98.02 and customs duty @ 10% is paid by the Petitioner.
3. On 6th September 2018, summons were issued to the Petitioner with respect to the classification of Ethanol Alcohol under CTH 22.07 and not under 98.02. The said summons were duly replied by the Petitioner and the Petitioner deposited Rs.30 lakh under protest. Thereafter a statement was recorded of the partner of the Petitioner in the year 2021. On 8th April 2022, the Respondents cleared Ethanol Alcohol under Bill of Entry no.8191536 by assessing under CTH 98.02. On 20th July 2022, issued a show cause notice on the classification issue which was duly replied by the Petitioner vide letter dated 23 rd January 2023 and is pending till today, since no order is passed by the Respondents.
4. Thereafter on 30th August 2023, the Petitioner imported a consignment of Ethanol Alcohol and sought clearance by filing the bill of entry no.7594166 which is the subject matter of the present proceedings. The said goods in question are in bottles of 500 ml and carries marking indicating the same to mean to be used solely as laboratory chemical. The Petitioner assessed the said goods under CTH 98.02 and deposited the appropriate duty along with technical analysis report issued by the supplier.
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5. On 3rd September 2023, proper officer permitted clearance of the goods for home consumption, but before the Petitioner could take delivery of the said goods from the custodian, the Petitioner received an email from the Respondents informing that the said goods are put on hold and the examination is scheduled on 8 th September 2023. The samples of the goods were then sent for testing in the laboratory. Thereafter summons were issued by the Respondents which have been duly complied. The Petitioner requested for release of the goods to avoid any demurrage charges, but the same were not released. It is on this backdrop that the present petition is filed.
6. The Petitioner submitted that the goods under consideration are being imported since last more than 5 decades and the classification under 98.02 has been accepted by the Respondents. Except the bill of entry which is subject matter of show cause notice dated 28 th July 2022 and which has not been adjudicated till today, the Respondents have cleared all the subject goods posts issue of the said show cause notice by accepting classification under 98.02. The Petitioner submitted that even the show cause notice dated 28th July 2022 has not been adjudicated today. The Petitioner further submitted that posts the filing of the present petition and service of the same, the Respondents on 18 th October 2023 served a seizure memo dated 6th October 2023 and as per 3 of 7 ::: Uploaded on - 10/11/2023 ::: Downloaded on - 24/02/2024 05:13:26 ::: Sayyed 930-WP-12757-2023.doc tracking record, the said seizure memo was posted on 17th October 2023 which is the date, when the present matter was listed for the first time. The Petitioner alleged that the seizure memo is back dated. The Petitioner stated that the said goods have been correctly classified 98.02 since it is a chemical used in laboratory and is packed in 500 ml bottles with correct marking on it. The Petitioner therefore, prayed for provisional release of the goods under Section 110 of the Customs Act, 1962.
7. On the other hand, the Respondents have taken us through the reply affidavit and contended that the correct classification should be 22.07 which attracts duty of 150%. The Respondents further submitted that on enquiry with the buyers of these goods, it has come to the notice that the goods are not used in the laboratory, but are used for various other purposes like sanitizer, vaccination etc. The Respondents therefore, submitted that for the goods to be classified under 98.02 same has to be used in the laboratory. The Respondents also submitted that the concerned goods are not a chemical falling under 98.02 and the said goods are expressly excluded under chapter note 2B of chapter of 29 of Customs Tariff Act. The Respondents furthers submitted that the goods should be solely used in the laboratory itself for the purpose of classification under 98.02. The Respondents has relied on paragraphs 14, 15 and 27 of the reply affidavit in support of its submissions. With 4 of 7 ::: Uploaded on - 10/11/2023 ::: Downloaded on - 24/02/2024 05:13:26 ::: Sayyed 930-WP-12757-2023.doc respect to the seizure memo, the Respondents have stated that there has been a delay in serving the same on the Petitioner. The Respondents further submitted that the Petitioner can make an application under Section 110A for release of the goods and therefore the present Petition is not maintainable.
8. Heard learned counsel for the Petitioner and learned counsel for the Respondents and with their assistance, have perused the documents annexed to the Petition.
9. On hearing the parties, we are of the view of the Petitioner would be justified in seeking provisional release of the goods. Admittedly, there is no dispute that the Petitioner has been importing these goods for last many decades and the classification under 98.02 has been accepted by the Respondents. Except the bill of entries which are the subject matter of show cause notice dated 28 th July 2022 all the imports are cleared under CTH 98.02. The Petitioner has replied to the said show cause notice, but till today the Respondents have not adjudicated and pass any order. The Petitioner is a regular importer of the said goods and not a fly by night operator. The goods are in the bottles of 500 ml and confirm to the marking requirement as per the chapter 98 of the Customs Tariff Act. The Respondents would not be justified in not permitting provisional release of goods by contending 5 of 7 ::: Uploaded on - 10/11/2023 ::: Downloaded on - 24/02/2024 05:13:26 ::: Sayyed 930-WP-12757-2023.doc that the goods under consideration are used in vaccine and sanitizer etc. The classification has to be seen at the time of import by the Petitioner and not the use to which it is put by the buyers of the goods from the Petitioner. There is no condition in the Customs Tariff under chapter 98 which imposes such an obligations on the Petitioner. In our view, in the light of these facts, the Respondents are not justified in refusing to release the goods provisionally.
10. The goods under consideration are not prohibited goods, but the only dispute between the Petitioner and the Respondents relates to classification which as observed above has been permitted to be cleared since last many decades under 98.02 ml by the Respondents. There is substance in the submission made by the Petitioner that there is no explanation for the seizure memo to be posted on 17 th October 2023 although dated 6th October 2023, moreso, in the facts of the present case, because the petition was served much before 18 th October 2023 and the said seizure was received only after the first date of hearing of the present petition.
11. We therefore, pass following order:-
ORDER
(i) The Petitioner is entitled for provisional release goods under bill of entry no.7594166 dated 30th August 2023 on execution of the bond.
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(ii) The Respondents are directed to release the goods within a period of 2 weeks from the execution of the bond by the Petitioner to secure the differential duty and consequential amount, if any.
(iii) All contentions of the parties with regard to the classification are kept open to be considered in appropriate proceedings.
(iv) Writ Petition is disposed of in above terms. No order as to costs.
[JITENDRA JAIN, J.] [G. S. KULKARNI, J.]
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