2022 (3) TMI 704 - HC - Customs

Court Orders Release of Imported Goods with Bond despite Classification Discrepancy

The court ordered the immediate release of imported goods upon the petitioner providing a bond, despite a discrepancy in classification as Base Oil or ... Seeking clearance of goods for home consumption - imported Base Oil - seeking waiver of penal charges like container detention charges, demurrage charges, ground rent charges etc. - HELD THAT:- As on date, the writ applicant has not been able to take delivery of the goods, said to be for home consumption. The goods are lying at the Mundra Port since June, 2021. The Revenue should not be interfered with, if the Revenue intends to carry out any further inquiry so as to be absolutely sure of the exact nature of the goods. Even with the materials as on date on record, the Revenue may, if it deems fit, issue a show cause notice calling upon the writ applicant to show cause as to why the goods should not be confiscated. If ultimately, any such show cause notice is issued, the writ applicant will have to meet with it. At this point of time, we are only concerned with the goods. There is no point in keeping the goods detained at the Mundra Port. The goods should be ordered to be released subject to the writ applicant executing a Bond of an amount to the satisfaction of the authority concerned (inclusive of interest, fine and penalty) with an appropriate further undertaking in writing on oath. The respondents nos.3 and 4 respectively are directed to release the goods after obtaining a Bond from the writ applicant of the requisite amount as above to its satisfaction and also an appropriate undertaking on oath at the earliest - petition disposed off. Issues:1. Clearance for home consumption of goods covered under Bill of Entry2. Waiver of penal charges for imported goods3. Release of detained goods at Mundra Port4. Discrepancy in classification of imported goods as Base Oil or Light Diesel OilAnalysis:1. Clearance for home consumption of goods covered under Bill of Entry:The petitioner sought a writ of mandamus to direct the respondents to allow clearance for home consumption of goods covered under a specific Bill of Entry. The petitioner imported Base Oil, classified under Customs Tariff Heading No. 2710, Sub Heading No. 27101971. The goods arrived at Mundra Port, and after multiple tests by different laboratories, a discrepancy arose regarding the classification of the product as Base Oil or Light Diesel Oil. The court acknowledged the need for further inquiry by the Revenue but ordered the immediate release of the goods upon execution of a bond by the petitioner.2. Waiver of penal charges for imported goods:The petitioner also requested a writ to waive penal charges such as container detention charges, demurrage charges, and ground rent charges for 12 containers of Base Oil imported. The court did not grant a specific order for waiver but directed the release of the goods subject to the petitioner executing a bond of a specified amount to the satisfaction of the authorities. The court emphasized that the release of goods should not impede the ongoing inquiry to determine the exact nature of the imported goods.3. Release of detained goods at Mundra Port:The petitioner faced challenges in obtaining clearance for the imported goods due to the discrepancy in classification. Despite the conflicting reports from various laboratories, the court ordered the release of the goods from Mundra Port upon the petitioner providing a bond and an undertaking on oath. The court highlighted the importance of allowing the release of goods while enabling the Revenue to continue its inquiry to ascertain the accurate classification of the goods.4. Discrepancy in classification of imported goods as Base Oil or Light Diesel Oil:The central issue in the case revolved around the classification of the imported goods as Base Oil or Light Diesel Oil. Different laboratory reports presented conflicting conclusions regarding the nature of the product. The final report from the Central Revenues Control Laboratory, New Delhi, classified the sample as Light Diesel Oil, leading to uncertainty and potential confiscation. The court acknowledged the conflicting positions of the petitioner and the Department and emphasized the need for further inquiry to resolve the classification dispute.In conclusion, the court directed the release of the goods upon the petitioner providing a bond, while allowing the Revenue to continue its inquiry. The judgment balanced the interests of both parties by ensuring the release of goods for home consumption while maintaining the authority's right to investigate the nature of the imported goods further.