TaxTMI 
TaxTMI 
2021 (8) TMI 1126
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....he Indian Institute Of Petroleum in respect of the sealed Sample No.5 and the Test Report analyzed by the Geo-Chem Laboratories Private Limited in respect of the Sealed Sample No.4 and it may be declared that the Seizure Memo issued by the respondent should be declared as null and void in the interest of justice. (C). That the Test Report submitted by the Geo-Chem Laboratories and Indian Institute Of Petroleum Dehradun in respect of the Sealed Sample No.4 and 5 which confirms that the subject goods are Naptha should be declared as a valid test report in the interest of justice." 2. The facts in brief are as under: 2.1 It is the case of the petitioner that it entered into contract with Aureole Trading (U.A.E) for supply of product Naphtha. The shipment of Naphtha was loaded from the port at Oman and was imported at the port Kandla. As per the Contract the subject goods were shipped through Delta Shipping And Trading LLC on Vessel MT Tuna vide 7 Bills of Lading. 2.2 The case of the petitioner is that prior to exporting the concerned consignment of Naphtha from the Port at Oman the subject goods were tested and a Certificate of Quality was given by Muscat International Shipping....
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....ch are in the custody of the department. The Court disposed of the petition directing that let a fresh application be filed by the petitioner before the competent authority for drawing samples and thereafter retesting be carried out from the different laboratories at the choice of the department as also the petitioner. Armed with this order, the petitioner got Sample 4 re-tested at Geo Chem Laboratories Private Limited which by its report dated 11.05.2021 confirmed that the goods were "Naphtha". The Sample 5 was tested at the Indian Institute of Petroleum (IIPM) and according to the report of the IIPM, dated 22.2.2021 the conclusion was that the Naphtha sample falls under light naphtha range. 2.8 The petitioner accordingly made a representation to the Chairman of the Central Board of Indirect Taxes and Customs that the laboratory report of the Custom House Laboratory dated 15.02.2021 was inconclusive. That though the authorities claimed that the subject goods were "Natural Gasoline Liquid" the scope of the test was to find out whether the sample falls under the category of light solvents such as Light Naphtha etc. The case of the petitioner before the CBIC was that "Natural Gasoli....
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....ld submit that a fresh contract of re-export has been entered into for which remittance of an amount is received which requires that the goods be released forthwith for re-export. 3.5 Mr. Nankani would further submit that having regard to the legislative history CTH 27101290 is a residuary entry "others" which does not cover Natural Gasoline Liquid. Prior to the year 2019 CTH 27101220 specifically covered Natural Gasoline Liquid. With the introduction of the Finance Bill of 2019 and as a result of the amendment with effect from 1.1.2020 the heading 2710 per se was restructured CTH 27102111 TO 13. He would therefore submit that the entry 271012910 remained unchanged meaning thereby that it never included Natural Gasoline Liquid. 3.6 In context of substitution of entries and it relating back to the original entry, Mr.Nankani, learned Senior Counsel, relied on the decison of the Supreme Court in the case of Zile Singh vs. State of Haryana reported in (2004) 8 SCC 1 and in the case of Govt. of India vs. Indian Tobacco Association reported in (2007) 7 SCC 396. On merits Mr.Nankani relied on a decision in the case of Dunlop India Ltd vs. Union of India reported in (1976) 2 SCC 241 subm....
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..... They are imported in violation of the provisions of the Foreign Trade Policy and in violation of the provisions of Section 3(5) of the Foreign Trade (Development & Regulation Act, 1992) r/w Section 11 of the said Act. In terms of Section 2(33) of the Customs Act, 1962, the goods imported are prohibited goods and are liable to confiscation. 4.6 Mr.Vyas, learned ASG, in support of his submission relied on the decision in the case of Union of India vs. M/s. Raj Grow Impex LLP & Ors., (Civil Appeal Nos. 2217-2218 of 2021) decided by the Supreme Court on June 17, 2021. With regard to the contention of Mr.Nankani, learned Senior Counsel, on the issue of the seizure being not by a proper officer in view of the decision of the Supreme Court in the case of Canon India Pvt Ltd vs. Commissioner of Customs, Mr.Devang Vyas, learned ASG, would dispute this proposition and would submit that he would, if called upon, to distinguish the judgment of the Supreme Court,would do so. 4.7 Mr.Devang Vyas, learned ASG, would also submit that the petition is premature. The applications for provisional release made by the petitioner under Section 110A of the Customs Act, 1962, are yet pending and the pet....
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....eport of 15.02.2021 which is dated 22.02.2021, which according to the petitioner confirms that it is Naphtha. 6. Reading of the Seizure Memo dated 26.02.2021 what is evident is that the Directorate of Revenue Intelligence (D.R.I) regional Unit, Gandhidham (Kutchh) has initiated an investigation in respect of the goods imported. The seizure memo indicates that since the declared goods are Natural Gasoline Liquid, none other than State Trading Enterprises are permitted to import these and the petitioner not holding such a status, the goods are prohibited and therefore are liable for confiscation as per the provisions of Section 111 of the Customs Act, 1962 and they are lying at liquid storage bank terminal, M/s. Friend Salt and Work and allied industries, Kandla, are so seized to be in safe custody pending such investigation. 7. Albeit, pursuant to an order passed by this Court on 05.04.2021, a re-test was undertaken and armed with this order, the petitioner contends that the sample 4 that was tested at the Geochem Laboratory is reported to be that of Naphtha by report of 11.05.2021 and the other report dated 18.05.2021 also confirms the consignment being Naphtha and therefore the....
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....al Gasoline Liquid. 9. The validity of the test reports of M/s. Geochem Laboratories Private Limited and of the Indian Institute of Petroleum have been disputed by the authorities on the ground - (i) That the test results have been influenced by providing misleading and biased content and parameters in the petitioner's close ending request letters. (ii) That the conclusion of the two reports supplied by the petitioner are different and contradictory to each other. (iii) The test certificate dated 11.05.2021 of M/s. Geochem Laboratories is vague in nature and does not specify even the category of Naphtha. The test report of the Indian Institute of Petroleum is not specific as it concludes "the sample marked as S5 falls under the light Naphtha range" which only indicates the range and not the goods. (iv) In contrast thereof there is a test report of the CRCL dated 28.05.2021, an accredited laboratory which shows that the consignment is that of Natural Gasoline Liquid. 10. In context of the argument of Shri Nankani with regard to misclassification being unjustified inasmuch as CTH 27101290 is a residuary entry with description "others" and not specifically Natural Gasoli....