2017 (6) TMI 1059 - HC - Customs

Court Upholds Tribunal Decision on Import Permit Requirement, Rejects Exemption Claim

M/s. Shree Pharma Versus The Commissioner of Customs (Chennai-II), Customs, Excise & Service Tax Appellate Tribunal

The court dismissed the appeal, upholding the Tribunal's decision that the appellant must adhere to the DGFT Notification dated 01.01.2015 and secure an ... Classification of imported goods - Bronopol - The subject goods were not released by the authorities, for the reason that the appellant has to put up technical literature with respect to the goods and its classification adopted in CTH 2930 9099, besides submitting the other import documents, already furnished - The appellant contended before the concerned authority that the requirement of production of CIB Registration certificate for the said goods does not arise, as the goods under import has not been classified under EXIM code 3808 of Chapter 38 in ITC (HS) 2012-Schedule-I (Import policy) - N/N. 106/RE-2013/2009-2014 dated 01.01.2015. Is the 2nd respondent Tribunal right in holding that the subject import of the appellant is governed by the restriction, issued under DGFT Notification No.106 (RE-2013)/2009-2014 dated 01.01.2015, which mandates obtainment of import permit from Registration Committee Central Insecticide Board? - Held that: - the aforesaid notification issued by the Director General of Foreign Trade is a law and not an executive instruction and the import and export is governed under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 - the contention of the appellant that the notification issued under Section 5 of the Foreign Trade Act, is a mere executive instructions and so the said notification would not apply to the appellant company cannot be accepted. Has the 2nd respondent Tribunal erred materially in not even referring are going into the provisions of Section 38 of the Insecticide Act, which exempts, the provisions of the Act including licensing/ obtaining import permit from the Central Insecticide Board under Section 9 of the said Act, when the goods under import are admittedly for non-insecticidal use? - Held that: - imports are governed by other Acts also and the contention of the appellant that Insecticides Act alone applicable, is not correct - The appellant, merely submitting a declaration to the end use that the Bronopol will be used for non-insecticidal purpose is not sufficient and therefore exemption under Section 38(1)(b) of the Insecticides Act cannot be applied automatically, to the appellant. The appellant has failed to produce evidence before the authority to establish that the Bronopol will be used for non-insecticidal purpose. In the absence of such evidence, it cannot be construed that the said Bronopol will be used only for non-insecticidal purpose - The notification dated 01.01.2015 issued by the Director General of Foreign Trade, clearly states that as per the policy decision even if the import is for non-insecticidal use, permission is necessary from the Registration Committee under the Department of Agriculture and Co-operation and that import cannot be allowed in the absence of the said permit. Hence, the Tribunal has rightly concluded that the appellant company is not entitled to the benefit of Section 38(1)(b) of the Insecticides Act, 1968. Appeal dismissed - decided against appellant company. Issues Involved:1. Applicability of DGFT Notification No.106 (RE-2013)/2009-2014 dated 01.01.2015.2. Exemption under Section 38(1)(b) of the Insecticides Act, 1968.3. Requirement of Import Permit/Registration Certificate from the Central Insecticide Board.4. Legal sanctity of the DGFT notification.5. Relevance of prior case laws and judgments.Detailed Analysis:1. Applicability of DGFT Notification No.106 (RE-2013)/2009-2014 dated 01.01.2015:The appellant argued that the DGFT Notification dated 01.01.2015, which mandates obtaining an import permit from the Registration Committee under the Central Insecticide Board, should not apply to their case as the imported goods (Bronopol) are intended for non-insecticidal use. The Tribunal upheld the notification's applicability, stating that even for non-insecticidal purposes, an import permit is necessary.2. Exemption under Section 38(1)(b) of the Insecticides Act, 1968:The appellant claimed exemption under Section 38(1)(b) of the Insecticides Act, 1968, which exempts substances intended for non-insecticidal purposes from the Act's provisions. The court noted that the appellant failed to provide sufficient evidence to prove that Bronopol would be used solely for non-insecticidal purposes. The Tribunal concluded that a mere declaration by the appellant was insufficient for claiming exemption.3. Requirement of Import Permit/Registration Certificate from the Central Insecticide Board:The authorities and the Tribunal emphasized the necessity of an import permit from the Registration Committee under the Department of Agriculture and Co-operation, as per the DGFT Notification dated 01.01.2015. The appellant's failure to produce this permit led to the rejection of their appeal.4. Legal Sanctity of the DGFT Notification:The appellant contended that the DGFT Notification was arbitrary and lacked legal authority. The court referenced the Kerala High Court's Division Bench decision, which reversed a prior judgment and upheld the notification as a valid subordinate legislation under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992. The court affirmed that the notification has legal sanctity and is binding.5. Relevance of Prior Case Laws and Judgments:The appellant cited previous judgments, including the Kerala High Court's decision in Maliakkal Industrial Enterprises, to support their case. However, the court noted that these decisions were rendered before the issuance of the DGFT Notification dated 01.01.2015 and were subsequently reversed by the Division Bench. The court concluded that these prior judgments were not applicable to the present case.Conclusion:The court dismissed the appeal, affirming the Tribunal's decision that the appellant must comply with the DGFT Notification dated 01.01.2015 and obtain an import permit from the Registration Committee. The court held that the appellant's arguments regarding exemption under Section 38(1)(b) of the Insecticides Act and the legal sanctity of the DGFT Notification were without merit. The substantial questions of law were answered against the appellant, and the appeal was dismissed with no order as to costs.