2022 (8) TMI 1148 - HC - Customs

Customs dispute resolved: Betel Nut goods provisionally released under Duty Free Tariff Scheme

The court allowed the writ petition, directing customs authorities to provisionally release the imported Betel Nut goods upon the petitioner furnishing a ... Smuggling - Import of Crane Betel nuts - Betel Nut would fall under Customs Tariff Heading 2106 and Sub-Heading 21069030 or not - Circular No.22/2004-Customs, dated 03.03.2004 - HELD THAT:- It is the consistent view of this Court that in case of provisional assessment, provisional release is permissible, in fine the direction given in the aforesaid batch of Writ Petitions is extended to the present matter as well. Hence, this Court permits the petitioner to make an application for provisional release under Section 110-A, on such application, when received, shall be disposed of by the Adjudicating Authority, after hearing the petitioner and simultaneous with a prima facie determination of the classification of the commodity, within a period of two (2) weeks from the date of receipt of the application. The Commissioner of Customs (Imports) is hereby directed to release the cargo covered under Bill of Entry No.7102157, dated 17.01.2022, provisionally subject to furnishing of PD bond for full value of the goods and furnishing of bank guarantee at 50% of the differential duty considering, Duty Free Tariff Preference Scheme for Least Developed Countries (LDC) benefit - Petition allowed. Issues Involved:1. Classification of imported Betel Nuts.2. Detention and provisional release of goods.3. Compliance with DGFT Notification.4. Jurisdiction and authority of customs officials.Detailed Analysis:1. Classification of Imported Betel Nuts:The petitioner imported 57,600 Kgs of Boiled Supari (Betel Nut product) from Myanmar and declared the goods under Customs Tariff Heading (CTH) 2106 9030. The customs authorities detained the goods, questioning the classification. The petitioner argued that similar goods were released at other ports under the same classification. The court noted previous judgments where Chapter 21, dealing with residuary food products, included Supari and emphasized that the classification dispute should be resolved by the customs authority.2. Detention and Provisional Release of Goods:The petitioner sought the release of goods under Section 110-A of the Customs Act, arguing that the goods were fit for human consumption as confirmed by FSSAI and lab reports. The court observed that the goods were not prohibited or banned and that provisional release is permissible in cases of classification disputes. The court directed the customs authority to allow provisional release upon furnishing a PD bond and a bank guarantee for 50% of the differential duty, considering the Duty Free Tariff Preference Scheme for Least Developed Countries (LDC) benefit.3. Compliance with DGFT Notification:The customs authorities detained the goods citing DGFT Notification No.20/2015-2020, which prohibits the import of Areca Nuts below CIF Rs.251 per Kg. The petitioner declared the goods at USD 1.50 per Kg, approximately Rs.114 per Kg, thus falling below the threshold. The court acknowledged the notification but emphasized the need for a proper classification determination before enforcing the prohibition.4. Jurisdiction and Authority of Customs Officials:The respondent argued that classification disputes should not be decided by a writ petition and that the customs authority has the discretion to determine the classification and security for provisional release. The court referenced the Supreme Court's stance on the discretionary powers of statutory authorities and affirmed that provisional release should be considered by the adjudicating authority upon request, except for prohibited goods.Conclusion:The court allowed the writ petition, directing the customs authorities to provisionally release the goods upon the petitioner furnishing the required bond and bank guarantee. The customs authority was instructed to determine the classification and complete the adjudication process within a specified timeframe. The court reiterated that provisional release is permissible in classification disputes, provided the goods are not prohibited.