TaxTMI 
TaxTMI 
2025 (12) TMI 1025
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....orities to forthwith release the validly imported bulk liquid cargo of distillate Fuel Oil SRFO presently stored in Customs Bonded Storage Tanks No. T-306 of M/s. Aegis Vopak Terminal Limited as well as in tank no. T-106 & T-112 of M/s. Gulf Petrochem India Pvt. Ltd. In connection with the Bills of Entry no. 4004388 and 4004389, both dated (Annexure 20. 08. 2025 A Colly) and further be pleased to pass all other consequential and effective orders in that regard in the interest of justice;" 2. The petitioner is involved in trading of industrial oil and other allied pursuits and is engaged in importing bulk liquid cargo being Distillate Fuel Oil SRFO in various quantities from tank vessel vide Bill of Entry Nos. 4004388 and 4004389 dated 20. 08. 2025 at Pipavav Port, Amreli ( Gujarat) . The petitioner also has valid documents showing genuineness of the material imported issued by the company from which it had purchased the material i. e. Oceanic Oil Power FZC. 3. The Custom authority collected the samples from the said imported bulk oil cargo for the purpose of chemical examination and issued Test Memo No. 168/2025-26 dated 25. 08. 2025. The samples were sent to the Central Reve....
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....omotive Diesel Fuel as per IS 1460: 2025. At the outset, he has submitted that on the basis of the said Test Report, the cargo has been seized after issuance of the Seizure Memo dated 01. 10. 2025. 7. Learned Senior Advocate has also referred to the parameters and their minimum and maximum values and has submitted that the parameters mentioned therein relating to density, kinematic viscosity, distillation-IBP, distillation recovery, cloud point and flash point are satisfied in the case of the petitioner and also in the case of the other traders whose goods have been released provisionally by the Kandla authority. While referring to the decision of the Apex Court in the case of Gastrade International vs. Commissioner of Customs, Kandla, (2025) 8 S. C. C. 342, it is submitted that the Test Report itself does not precisely state that the samples collected from the cargo of the petitioner conclusively mention that the cargo is not Distillate Oil or it is a Automotive Diesel Fuel. Thus, it is urged that the impugned Seizure Memo may be quashed and set aside. SUBMISSIONS ON BEHALF OF THE PETITIONERS: 8. In response to the aforesaid submissions, learned Senior Standing Counsel Mr....
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....ranted the benefit of release of subject goods imported at the Kandla port as the same is materially different from the Distillate Oil imported by the petitioner. 11. Learned Senior Standing Counsel has finally contended that on verification of the end use of the imported goods/oil traded in some cases, it has come to notice that the goods declared as Distillate Oil have been finally supplied to goods transport agencies, construction companies, etc. and they have been used as diesel in trucks, excavators being non-stationary or as light diesel oil in construction business, which strengthens the DRI belief that the subject goods are nothing but restricted for import in terms of the policies as mentioned hereinabove. Thus, it is submitted that parity claimed by the petitioner with the goods released by the Kandla authority cannot be given since the petitioner stand on a different behavioural footing. It is also submitted that the reliance placed by the petitioners on the judgment of the Apex Court in the case of Gastrade International (supra), which has also been relied upon by the authorities of Kandla Port for releasing the Distillate Oil, will not come to the rescue of the peti....
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....art 18) : 2020 371. 3 -- 10 Flash Point (Abel) (°C), min IS: 1448 (Part 20) : 2019 44. 97 Min 35 11 Kinematic Viscosity at 40°C, cSt IS 1448 (Part 25) : 2018 2. 2884 2. 0 to 4. 5 12 Density at 15°C (kg/m3) IS: 1448 (Part16) : 2014 820. 3 810-845 13 Water Content mg/kg IS: 1448 (Part 18) : 2015 Nil 0. 02 14 Cloud Point, °C, max IS: 1448 (Part10/Sec 1) : 2021 -4. 6 -16 15. The final opinion mentioned under the Report is that "Based on the above tested parameters, the sample u/r does not meet the requirement of Distillate Oil as per IS 16731: 2019, with respect to parameter at sr. no. 14, the sample u/r has the characteristics of Automative Diesel Fuel as per IS 1460: 2025". Thus, there twin reasons assigned for seizure of the cargo. The Test Report reveals the Cloud Point as -4. 6°C. Thus, the first reason which disqualifies the cargo of the petitioner from being declared as Distillate Oil is the parameter/characteristic at Sr. No. 14, i. e. Cloud Point. The Test Report indicates that the Cloud Point of the cargo of the petitioners is -4. 6°C, whereas the specified value of ....
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....the colder weather conditions, the cloud point requirement becomes significant. For other usage the cloud point is not a significant parameter. Hence, the end use of the sample under reference may be ascertained at your end." 17. We may at this stage refer that in the case of Distillate Marine Fuel, which was collected as a sample by the Kandla Customs authority, the same was also having a Cloud Point below -16 Degree Celsius, i. e. -11°C, whereas in the case of the petitioner it is -4. 6. Thus, the Distillate Marine Fuel having a Cloud Point of -11°C was ordered to be released by the Customs authority on the opinion of the CRCL, and hence, in our opinion, the petitioner cannot be discriminated, since the respondent authorities have no definite opinions and the opinions vary so far as the parameter of Cloud Point is concerned. There is no definite conclusion with regard to the cloud point, and it depends upon the vessel being operated in specific areas. At this stage, we may also refer to the characteristics of Indian Standards for petroleum products relating to Marine Fuel. The table annexed to the pour point/cloud point/cold filter plugging point for vessels operated b....
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....e of HSD except for stating that the samples conform to certain specifications of the IS 1460: 2005. 97. 7. In view of the ambiguity and lack of clarity in the expert opinion/laboratory test results, it would be unsafe to draw the inference that the Department had been able to prove their case even by applying the test of preponderance of probability merely because the samples conform to certain parameters. 97. 8 If the Department with all the resources at their command and access to various laboratory facilities could not get the samples tested in respect of all the 21 parameters, expecting the assesses-appellants to get the samples tested to show that these do not conform the specifications and are not HSD does not appear to be reasonable. Thus, shifting of onus to the assessees to prove otherwise appears to be unreasonable and meaningless. 97. 9. The burden was not on the assessees to demonstrate that non-conformity with the remaining 8 parameters would vitiate the conclusion that the samples were of HSD. 98. The aforesaid difficulties in our opinion can be overcome, if we apply the test of "most akin" as contemplated under Rule 4 of the Gener....
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....ert opinion/laboratory test results, it would be unsafe to draw the inference that the Department had been able to prove its case even by applying the test of preponderance of probability merely because the samples conform to certain parameters. It is further held that if the Department, with all the resources at its command and access to various laboratory facilities, could not get the samples tested in respect of all the 21 parameters, expecting the assesses-appellants to get the samples tested to show that these do not conform to the specifications and are not HSD does not appear to be reasonable. It is also held that the real test for classification would be as to whether any goods or substance in question is "most akin" or bears the closest resemblance or similarity to any of the specified goods mentioned under the headings and relative Section or Chapter Notes under the Customs Tariff Act, 1975 and not by applying the test of preponderance of probability. 20. With regard to the second reason assigned in the report mentioning that "sample has the characteristic of Automative Diesel Fuel, we find the same as ambiguous, and uncertain, as it does not mention on what parameters....
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....illation range and other parameters. Further such sample may have close similarity with any one or more of the above referred Indian Standards as they have overlapping parameter and come under the category of 'diesel fraction' or 'diesel'. 5. In view of the above, whether the sample under reference is more akin to HFHSD (IS 16861) or Distillate Marine Fuel (IS 16731), or any other distillate oil is on no consequence as all these products are diesel fraction." 21. So far as the samples of Distillate Oil, which were collected by the Customs authority at Kandla, and sent to Vishakapatnam are concerned, on the opinion sought from the Assistant Commissioner, the Director of CRCL, it is opined that the sample if is akin to High Flame High Speed Diesel IS-16861 or Distillate Marine Fuel IS 16731 or any other Distillate Oil having the "diesel fraction" is of no consequence, as all these products have overlapping parameters, in fact, be said to have a "diesel fraction or diesel", which is automotive fuel. Thereafter, the authorities have arrived at the findings for this parameter of Distillate Oil, which were seized by Kandla Custom House and sent to Visakhapatnam Laboratory in ....