2022 (1) TMI 818 - HC - Customs

Court allows writ petitions, orders fresh testing, releases goods on bond, sets aside Seizure Memo.

The court allowed the writ petitions, directing the respondents to draw fresh samples for testing by a Government Laboratory or FSSAI and to release the ... Seeking provisional release of seized goods imported by the petitioner - ‘proper officers’ for the purpose of Section 110 of the Customs Act - It is the case of the petitioner that the respondent no.4 neither completed the assessment of the goods nor made any communication with the petitioner regarding those goods assessed for a period of 5.5 months from the date of filing of Bill of Entry - HELD THAT:- A perusal of the Affidavit-in-Reply filed by the Respondents clearly indicate that both the parties are ad-idem that the Public Notices dated 23rd October 2019 and 16th June 2021, had issued a list of goods mentioned under Chapter 8 and 21 which could not be analyzed/tested by DYCC. It is admitted by the Respondents that the goods in-question however were tested by the said DYCC Lab, which had no facility to carryout such testing. The only explanation sought to be rendered by the Petitioner in the Affidavit-in-Reply is that the Petitioner did not make any request of retesting the samples by Government Laboratory or by FSSAI. On the other hand the Petitioner has rightly contended that the Petitioner came to know about such testing by DYCC only when the Order of Seizure Memo was served upon the Petitioner. However, since after issuance of the impugned Seizure Memo, which is the subject matter of one of the Writ Petition, the Respondents passed an Order for provisional release and since the Petitioner could not get any interim Order in these Petitions till date though they are pending for quite some time, we do not propose to quash the Order of Seizure Memo unconditionally. We have not expressed any views in this matter at this stage whether the Advance Ruling relied upon by the Petitioner would cover the goods in-question or not in view of the rival contentions raised by the Respondents in respect of the process followed relating to the said goods. It is an admitted position that the said DYCC could not have carried out such testing at the first instance, we are inclined to direct the Respondents to draw samples of the goods imported by the Petitioner which are subject matter of these Petitions and to send to the Government Laboratory or FSSAI within one week from today - Since the Authorities have admitted that the earlier samples drawn and tested by DYCC could not have been drawn contrary to the two public notices and the said report being the basis for issuance of Seizure Memo, the Respondents is directed to release the goods in question on the Petitioner submitting P.D. bond. Petition allowed. Issues Involved:1. Validity of the Provisional Release Order dated 22nd October 2021.2. Validity of the Seizure Memo dated 3rd August 2021 and the DYCC JNCH Laboratory Test Reports.3. Classification of imported goods under Chapter 21 of the Customs Tariff Act.4. Authority of the Special Intelligence and Investigation Branch (Import) under Section 110 of the Customs Act.5. Binding nature of the Authority for Advance Rulings' decision dated 31st March 2017.6. Release of goods on execution and furnishing of a Provisional Duty Bond.Detailed Analysis:1. Validity of the Provisional Release Order dated 22nd October 2021:The petitioner challenged the Provisional Release Order dated 22nd October 2021, seeking its quashing and setting aside. The court noted that the respondents had issued the order during the pendency of the writ petition and that the petitioner sought a writ of mandamus for the assessment and clearance of goods on payment of applicable duty under Chapter 21.2. Validity of the Seizure Memo dated 3rd August 2021 and the DYCC JNCH Laboratory Test Reports:The petitioner contested the Seizure Memo dated 3rd August 2021, arguing that the goods covered under Chapter 21 could not be analyzed/tested at DYCC, JNCH Laboratory due to non-availability of facilities, as per Public Notices dated 23rd October 2019 and 16th June 2021. The court observed that both parties agreed that DYCC could not have tested the goods, and the seizure based on DYCC's report was thus untenable and contrary to the Public Notices.3. Classification of imported goods under Chapter 21 of the Customs Tariff Act:The petitioner argued that the imported goods, including various processed betel nut products, were classified under Chapter Head 21069030, as confirmed by the Authority for Advance Ruling on 31st March 2017. The respondents, however, contended that the process relating to the imported goods in question differed from the process declared in the Advance Ruling.4. Authority of the Special Intelligence and Investigation Branch (Import) under Section 110 of the Customs Act:The petitioner sought a declaration that the officers of the Special Intelligence and Investigation Branch (Import) were not 'proper officers' for the purpose of Section 110 of the Customs Act. The court did not explicitly address this issue but focused on the procedural aspects and the validity of the seizure and testing process.5. Binding nature of the Authority for Advance Rulings' decision dated 31st March 2017:The petitioner emphasized that the Advance Ruling dated 31st March 2017 was binding on the respondents, as it had attained finality without any appeal. The court acknowledged the petitioner's reliance on this ruling and noted that the Madras High Court had previously quashed a similar seizure memo based on the same Advance Ruling.6. Release of goods on execution and furnishing of a Provisional Duty Bond:The court directed the respondents to release the goods upon the petitioner submitting a P.D. bond, acknowledging that the earlier samples tested by DYCC could not have been validly tested. The release was made subject to the testing report to be submitted by a Government Laboratory or FSSAI and to the final assessment.Conclusion:The court allowed the writ petitions, directing the respondents to draw fresh samples for testing by a Government Laboratory or FSSAI and to release the goods upon submission of a P.D. bond by the petitioner. The court set aside the impugned Seizure Memo, subject to final assessment based on the fresh test report, and kept all other contentions open for future consideration.