2018 (7) TMI 1851 - HC - Customs

Kerala High Court Overturns Confiscation Order for Imported Product Classification Dispute

M/s. ARBEE BIOMARINE EXTRACTS PVT LTD REPRESENTED BY ITS CHAIRMAN P.K. RAJU. Versus CHIEF COMMISSIONER OF CUSTOMS, CUSTOMS & CENTRAL EXCISE BHAVAN, ERNAKULAM AND COMMISSIONER OF CUSTOMS, OFFICE OF THE COMMISSIONER OF CUSTOMS, CUSTOM HOUSE, WILLINGTON ISLAND, COCHIN AND THE DEPUTY COMMISSIONER OF CUSTOMS (GR. VII) OFFICE OF THE COMMISSIONER OF CUSTOMS, COCHIN

The Kerala High Court set aside a confiscation order in a case involving the disputed classification of an imported product under the HS code. The court ... Maintainability of petition - principles of natural justice - Department disputes the nature of the substance imported - Held that:- This Court, under Article 226 of the Constitution of India, will not adjudicate on disputed questions of fact. But the petitioner's grievance remains that he had no opportunity of hearing before the 2nd respondent passed Ext.P15 order. True, the order refers to hearing the petitioner. In reply, Sri Mathew explains it away: the petitioner's representative was incidentally present when the matter was taken up. The representative’s presence, however, cannot be a substitute to procedural safeguard provided in the Act. The petitioner ought to have asked to show cause. Petition disposed off setting aside Ext.P15. Consequently, 2nd respondent will issue a notice within one week to the petitioner and, then, the petitioner may submit its reply. Eventually, the 2nd respondent will consider the issue within one week after his receiving the petitioner’s reply. Issues: Classification of imported product under HS code, Violation of principles of natural justice, Adjudication on disputed questions of fact, Procedural safeguards under Customs ActThe judgment by the Kerala High Court involved a case where a private limited company imported Acyclic Hydrocarbon Unsaturated Squalene 80% under an Advance Authorisation. The Customs authorities later disputed the classification of the product under HS code 15042090 instead of the declared classification of 29012990 based on test reports. The petitioner contended that they were not given a proper hearing before the cargo was confiscated. The court entertained the writ petition due to alleged violation of natural justice but clarified that it would not adjudicate on disputed facts. The petitioner's plea of lack of opportunity for a hearing was acknowledged, leading to the setting aside of the confiscation order.The court emphasized that while the petitioner's representative was present during proceedings, it did not fulfill the procedural safeguards required under the Customs Act. The judgment highlighted the importance of following due process and providing an opportunity for the petitioner to show cause before passing confiscation orders. The court disposed of the writ petition, directing the Customs authorities to issue a notice to the petitioner within a week for a proper hearing and consideration of their reply within the following week.Regarding the request for a lab report on the percentage of Squalene, the court declined to direct the authorities but suggested that the petitioner could represent the need for the report to the second respondent for consideration. The judgment concluded by emphasizing the importance of following procedural safeguards and ensuring a fair hearing for parties involved in customs matters, ultimately upholding the principles of natural justice in administrative actions.