1985 (4) TMI 72 - HC - Customs

Court distinguishes white cement from ordinary portland cement, orders clearance of imported white cement

The Court ruled in favor of the petitioner, holding that white cement and ordinary portland cement are distinct commodities. The refusal to clear the ... Cement - Writ jurisdiction - Taxing statute Issues Involved:1. Refusal of Customs Authorities to clear imported white cement.2. Classification of white cement versus ordinary portland cement.3. Jurisdiction and authority of the Customs Authorities.4. Validity of the adjudication proceeding and penalties imposed.Issue-Wise Detailed Analysis:1. Refusal of Customs Authorities to Clear Imported White Cement:The Customs Authorities refused to clear the imported white cement, endorsing on the Bill of Entry that the goods were to be warehoused under Section 49 of the Customs Act, 1962, and that an adjudication proceeding would follow. This refusal was based on the verbal information given to the petitioner that white cement was a canalised item under Item 8, Part B of Appendix 5 of the Export Import Policy for 1984-85. The petitioner challenged this refusal, leading to the initiation of adjudication proceedings.2. Classification of White Cement Versus Ordinary Portland Cement:The core issue was whether white cement and ordinary portland cement were distinct commodities. The petitioner argued that white cement is different from ordinary portland cement, relying on the Imported Cement (Control) Order, 1978, which defines 'cement' to exclude white cement. Additionally, the petitioner cited booklets from the Indian Standard Institution and a Press Note from the Government of India, which differentiated between the two types of cement. The Customs Authorities, however, classified the imported white cement as ordinary portland cement, subjecting it to canalisation restrictions.3. Jurisdiction and Authority of the Customs Authorities:The petitioner contended that the Customs Authorities acted arbitrarily and without jurisdiction by not adhering to the statutory definitions and authoritative determinations distinguishing white cement from ordinary portland cement. The petitioner argued that the Customs Authorities had no authority to override the statutory definition and treat the two commodities as the same based on undisclosed chemical tests. The Court agreed, stating that the view taken by the Customs Authorities was perverse and contrary to the statutory definitions and commercial parlance.4. Validity of the Adjudication Proceeding and Penalties Imposed:The adjudication proceeding concluded with the Collector of Customs determining that the imported white cement was ordinary portland cement and imposing a fine and penalty on the petitioner. The petitioner challenged the validity of this proceeding, arguing that it was biased and conducted with a closed mind. The Court found that the Customs Authorities' interpretation was unreasonable and perverse, quashing the adjudication proceeding and the penalties imposed.Conclusion:The Court held that ordinary portland cement and white cement are two distinct commercial commodities. The importation of white cement was valid and not in violation of any law. Consequently, the refusal to clear the goods, the show cause notice, and the adjudication order were deemed illegal and without jurisdiction. The Court quashed the proceedings and directed the Customs Authorities to allow the clearance of the imported white cement. The writ petition succeeded, and costs were assessed at 10 grams.