TaxTMI 
TaxTMI 
TaxTMI 
2026 (2) TMI 45
X X X X Extracts X X X X
X X X X Extracts X X X X
....'ble Gujarat High Court in Noya Infrastructures LLP & Ors vs. Union of India & Ors. - 2025 (12) TMI 1026 - (Gujarat High Court) may be set aside / modified. 1.1 Brief facts of the case are that appellant imported Distillate Marine Oil classifying the same under CTH 2710 19 61 of the Customs Tariff Act, 1972, vide Bills of Entry No. 4614126 dated 19.09.2025 and NO. 4638916 dated 21.09.2025. According to the department, the subject goods contained diesel or High Flash High Speed Diesel (HFHSD). According to the investigating agencies, HFHSD of IS 16861 is classified under CTH 2710 19 49, and its import is restricted and allowed through IOC, subject to para 2.21 of the Foreign Trade Policy. 1.2 The samples of the goods were sent for testing to CRCL Visakhapatanam and the same were examined by CRCL, Visakhapatnam, which subsequently issued two Test Reports dated 07.10.2025 and 09.10.2025. The findings of these reports are summarized as follows: a) The sample does not meet the parameter of IS 16731-Distillate marine fuel in respect of cloud point, which is above -16 °C, which makes it unsuitable for application in marine fuels. b) Samples were analysed on GC-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....FHSD of IS 16861 for the limited purpose of considering provisional release u/s 110A. Despite the above observations, the Commissioner imposed arbitrary and unreasonable conditions for the provisional release of the subject goods. Commissioner has imposed few conditions for the provisional release of the subject goods which are as under:- I. The importer shall furnish an End-use bond and undertaking to the effect that:- a. The goods shall not be used as Automotive Diesel (IS 1460) or HFHSD (IS 16861) or as a propulsion fuel on board vessels; use, if any, on board shall be limited to emergency generator/fire-pump engines, etc., consistent with SOLAS and as intended for DMX grade of IS 16731; b. In case the goods are sold to any other buyer, the responsibility to ensure that goods will be used in the same manner as specified in (a) above will be on importer and appropriate documents at the end of the buyer will be maintained demonstrating end use. c. The importer and the buyer shall maintain batch-wise accounts of storage, processing, and consumption of the provisionally released goods and shall produce the accounts on demand by the investigating o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n in Marine Fuels. Department alleged that Test Reports dated 07.10.2025 and 09.10.2025. indicate that the cloud point of the samples is -6°C and -10°C, and does not meet the parameter of IS 16731-Distillate Marine Fuel, which is above -16 °C. 2.3 He further submitted that the cloud point of the sample depends on the climatic conditions of the area in which the fuel has to be used. Thus, subject goods cannot be seized merely on the basis of the parameter of cloud point. In this regards he relied upon decision in case of Aparajita Energy Private Limited Versus Union of India, 2025 (12) TMI 1025 - (GUJARAT HIGH COURT) and Noya Infrastructure LLP & Ors. Vs. Union of India & Ors, 2025 (12) TMI 1026 - (GUJARAT HIGH COURT) wherein Hon'ble Court held that the cargo imported by the petitioner cannot be ordered to be seized on the basis of the parameter of cloud point, as it will be relevant only at the place, vessel, and time of use, and will depend on the end user. 2.4 He further submitted that in above decisions Hon'ble High Court of Gujarat held that Seizure Memos issued by the Intelligence Officer of the DRI are hereby quashed and set aside and it was clarified that, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the appellant prays that in view of the order passed in M/s. BP Wire Industry vs. Commissioner of Customs (Preventive), Lucknow (supra), the matter may be heard by Single Member Bench. I agree with the learned Counsel for the appellant and I am of the view that this matter may be heard by Single Member Bench. 3.1 The learned AR has reiterated the impugned order passed by the Commissioner. She further submitted that though the Commissioner has ordered provisional release of goods but imposed certain conditions as mentioned in para 7 and 8 of the impugned order. She further submitted that the Tribunal should uphold the conditions mentioned in the para 7 and 8 of the impugned order. 4. I have heard both sides and perused the record. The appellant in the present case has challenged the conditions for provisional release of goods imposed by Commissioner of Customs vide impugned order. The issue to be decided in this appeal is whether the conditions imposed the Commissioner in the impugned provisional order are proper and sustainable or the conditions are not in consonance with the order / judgment of Hon'ble Gujarat High Court passed in similar matter. 4.1 It is pertinent to me....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the cloud point of the samples is -6°C and -10°C, and does not meet the parameter of IS 16731- Distillate Marine Fuel, which is above -16 °C.I agree with submissions of the appellant that the purported basis for seizure is an alleged deviation under a single parameter, i.e., Cloud Point (Maximum) which, as per IS 16731:2019, is not a determinative or mandatory specification for the classification of goods as "Distillate Marine Fuel." The reliance on one non-essential specification while ignoring compliance with all other mandatory parameters appears improper. 4.3 I find that on this aspect issue is squarely covered in favour of appellant in case of Aparajita Energy Private Limited Versus Union of India, 2025 (12) TMI 1025 - GUJARAT HIGH COURT, wherein it is held as under: "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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....w -16°C, i.e. -11°C, whereas in the case of the petitioners it is -6.2°C and -5.4°C. 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 petitioners 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, and also with regard to the diesel fraction having fractional hydrocarbons. 25. In the present case, if the "most akin" test is applied, the same would, in fact, be in favour of the petitioners, as the respondents have not definitively concluded that the Distillate Oil imported by the petitioners is, in fact, High Flame High Speed Diesel or a Diesel to an extent that it would change the nature of classification from Distillate Oil to Diesel. The petitioners cannot be discriminated in view of the communication dated 28.10.2025 written by the CRCL, Delhi, to the Assistant Commissioners of Kandla authorities relating to the similar parameters/characteristics which were found in the tests of the samples of Distillate Oil. However, at th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... may clarify that so far as the parameters/characteristics of Distillate Oil relating to cloud point are concerned, the Director of CRCL has already clarified that the relevance of cloud point would depend upon the climatic conditions of the area in which the same is used. Ultimately, it is clarified that if the Distillate Oil is a marine fuel used in ships operating in colder weather conditions, the cloud point becomes relevant, and for other usages, the Cloud Point is not a significant parameter, and hence, it is further informed that the end use of the sample under reference may be ascertained. 26. Thus, 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 by Distillate Marine Fuel stipulates that "Pour point cannot guarantee operability for all ships in all climates, " and the purchaser should confirm that the cold flow characteristics ( pour point, cloud point, cold filte....