TaxTMI 
TaxTMI 
2026 (2) TMI 302
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....12.2024. 1.2 It was alleged by the department that on tracking the vessel on Shipping Line Website, it was found that the containers were laden on vessel on 04.01.2025, whereas, House Bill of Lading was issued on 03.12.2024. In view of above, goods covered under impugned B/E were put on hold to rule-out any possibility of circumvention of directive issued by the Ministry of Steel for issuance of NOC on one-time basis for shipments where Bill of Lading has been generated on or before 3rd of December 2024. 1.3 An email dated 07.02.2025 was sent to shipping line M/s Wan Hai Lines (India) Pvt. Ltd. for providing copy of Master BL issued against House BL. No. FS241205001 dated 03.12.2024 and port of call list of vessel BAO HANG YUN, Voyage No. 28. Vide email dated 07.02.2025, the shipping line provided copy of Master BL No. 142E516966 dated 04.01.2025 issued in case of M/s Shree Khatu Shyam Steel & Tubes LLP and further provided copy of port of call list of Vessel BAO HANG YUN wherein it is mentioned that the Vessel reached on Guangzhou Port, CHINA on 02.01.2025 and departed on 04.01.2025. 1.4 The Goods covered under B/E No. 8109186 dated 31.01.2025 were examined on 10.02.2025 ....
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....ttempting to circumvent this requirement by obtaining a House Bill of Lading dated on or before December 3, 2024, while the actual shipment (evidenced by the Master Bill of Lading) occurred after that date. This practice is not in compliance with the one-time exemption provision. Therefore, to reiterate, the one-time NOC/exemption applied exclusively to shipments where the Master Bill of Lading was issued on or before December 3, 2024. House Bills of Lading with earlier dates for shipments occurring after December 3, 2024, do not qualify for this exemption. The request in paragraph 3 aims to prevent such fraudulent circumventions." 2. The learned AR apart from putting forth the ground of appeals, places reliance on circular No. S-20011/14/2021/TECH of Ministry of Steel dated 26.10.2023 which was issued prior to filing of B/E in the present matter. The circular is as reproduced below:- F. No. S-20011/14/2021-TECH Ministry of Steel Government of India Technical Division Udyog Bhawan, New Delhi Dated: 26 October, 2023 CIRCULAR "Subject: All the steel importers importing steel without BIS license to mandatorily apply and seek clarification from....
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...., learned Advocate referred to the decision of M/s Shiv Shakti Trading Company Vs. Commissioner of Customs (Preventive) & Anothers reported at 2016 (4) TMI 408- Delhi High Court and emphasized on para 23 of this ruling which is reproduced below:- "23. Considering that the time limits for issuance of an SCN in terms of Section 110 (2) are sacrosanct, if at the time of seizure of the goods there is waiver by the person from whom the goods were seized, or the owner of the right to be given an SCN, in the expectation of an expedited adjudication, then the reasonable time within which the adjudication should be completed should be six months from the date of such seizure. If, despite the waiver of the right to be given an SCN, no adjudication order is passed within the period of six months from the date of seizure, the person waiving the right to be given an SCN can no longer be held bound by such waiver. The consequence would be the same as is envisaged by Section 110 (2) of the Act i.e., the immediate unconditional release of the goods in favour of the person from whom the goods have been seized. Notwithstanding such unconditional release, it will still be open to the Departm....
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....xteen) appeared to be liable for confiscation under section 111(d) and (m) of the Customs Act, 1962. The goods imported vide above Bills of Entry were Seized vide Seizure Memo dated 27.02.2025 under section 110(1) of the Customs Act, 1962, and handed over to the custodian vide Supurtanama dated 27.02.2025. 3.3 From the investigation conducted in this matter, it was alleged that the forwarder M/s Premji Kanji Masani provided copy of Master Bill to CB vide email dated 17.01.2025 before filing of Bill of Entry but CB did not provide the same to the importer. It appeared to the department that the importer, has attempted to clear goods "Cold Rolled Stainless Steel Coil Grade J2" on the basis of House BL dated 03.12.2024 and NOC issued against House BL. However, as actual shipment is of later date i.e. 04.01.2025, in light of OM dated 03.01.2025 and Circular dated 20.10.2023, goods became prohibited in nature in absence of NOC for shipment occurring after 03.12.2024. The said acts of omission and commission, the respondent has rendered themselves liable for penalty under Section 112(a) of the Customs Act, 1962. The Forwarder M/s Premji Kanji Masani Private Limited provided copy of Ma....
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.... E.LT. 392 (Tri. Ahmd.)]. Accordingly, I allow the appeals on the preliminary legal ground of limitation under Section 110(2) of the Customs Act, 1962, without going into the merits of the case. The impugned Order-in-Original No. MCH/ADC/ZDC/335/2025-26 dated 06.11.2025, having been passed after the expiry of the statutory period of six months from the date of seizure, is held to be without jurisdiction and is hereby set aside. As a consequence of the seizure becoming illegal after 27.08.2025, the goods are liable to be returned to the Appellant forthwith. The confiscation of the goods, imposition of Redemption Fine, and penalty are set aside. The goods shall be released within 7 days of the receipt of this order. 4. Learned Advocate stated that the factual timeline, which is undisputed by either side, is as follows: * The goods were seized vide Seizure Memo dated 27.02.2025. The Respondent, vide letter dated 25.04.2025, requested a waiver of the Show Cause Notice and Personal Hearing, explicitly stating that it was to "ensure an early decision in the matter" and "to save the expense of demurrage and detention." * The mandatory six-month period for issue of SCN....
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....ver of SCN by the assessee, the adjudication should have been completed within reasonable period i.e. period provided under Section 110(ii), therefore, the observation taken by the Hon'ble High Court is applicable in the present case. As regard the submission of Ld. AR that in the judgment of Shiv Shakti Trading Company (supra), the goods were seized and were not released provisionally whereas, in the present case goods had been released provisionally. 6. In our considered view, that fact will not matter for the reason that Hon'ble High Court has decided the issue on the basis that the adjudication should have been completed within the reasonable period, therefore, the difference of this fact will not have any impact in applicability of this judgment in the present case Accordingly, following the judgment of Hon'ble High Court as cited above, we set aside the impugned order and allow the appeal. 4.4 They have imported J2 grade stainless steel coils which are outside the preview of steel and steel products (quality control) order, 2024 as is evident from the letter dated 13.09.2024 issued by Ministry of Steel to M/s Swastic Overseas, Sonepat, Haryana who had ....
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.... Therefore, to reiterate, the one-time NOC/exemption applied exclusively to shipments where the Master Bill of Lading was issued on or before December 3, 2024. House Bills of Lading with earlier dates for shipments occurring after December 3, 2024, do not qualify for this exemption. The request in paragraph 3 aims to prevent such fraudulent circumventions" 4.7 The Respondent submits that email dated 20.02.2025 created difference between the house bill of lading and master bill of lading. There is no allegation that house bill of lading dated 03.12.2024 is forged by the respondent. The bill of entry is dated 31.01.2025 and thus, any clarification or instruction cannot be applied retrospectively and the imported goods cannot be treated as prohibited based on any new restriction placed after the date of bill of lading or date of import of goods." 4.8 Learned Advocate pointed out that the circular referred by the department is of Ministry of Steel which in fact is putting restraints on the trade in so far as even the items which are not covered by BIS standards have also, been made restricted simply by issue of a letter/ circular in which it does not even indicate as to under w....
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....rted at 2014 (304) ELT 660 (Delhi) specially para 17 to emphasize that essential legislative policy and substantive rights cannot be circumvented by a subordinate legislation and same has to be by main legislation. Substantive restriction, he emphasized therefore cannot be placed by a departmental circular and therefore, circular of the Ministry of Steel subjecting non-BIS standardized goods to NOC by Committee in each case was incorrect for want of legislature mandate. He also relies on decision in South Gujarat Warp Knitters Association Vs. UOI as report in 2025 (391) ELT 76 (Gujarat) to emphasize that the agency like DGFT has no power to amend Foreign Trade Policy itself. 4.10 The respondent also seeks reliance on decision in the matter of Intel Cost Pvt Ltd Vs. UOI reported at 2017(345) ELT 2017 (Gujarat) to emphasize that clarification through a circular cannot amend an entry to bring about restrictions. He also pointed out that it is a trite law, as has also been laid down in 2007(208) ELT 321 (SC) in the matter of Suchitra Components Ltd Vs. Commissioner of Central Excise Gangtok that beneficiary circular has to be applied retrospectively while a special circular is appli....
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....adiction with Section 15, Section 16 read with Section 25 of the BIS Act. Further, there is no provision for NOC under the whole BIS Act. Further, imported goods are not covered under the Steel and Steel Products (Quality Control) Order, 2024 and so, these are not restricted goods. Further, NOC issued to the Respondent covers the imported goods and thus, there is no violation of Circular dated 20.10.2023. The email dated 20.02.2025 issued by the Ministry of Steel cannot be applied retrospectively to create distinction between House bill of lading and Master Bill of lading. The goods wherein House Bill of Lading date is prior to 03.12.2024 are also allowed to be imported. 6. The learned AR vide his submissions dated 23rd January, 2026 made the following points:- * Ministry of Steel has vide order dated August 29, 2024 published Steel and Steel Products (Quality Control) Order, 2024 which were to be implemented with immediate effect i.e. August 29, 2024. As per this order, steel and steel products specified in column 3 of Schedule 1 of the said order shall conform to the corresponding Indian Standards specified in column (2) of the said Schedule. The goods falling under H....
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....ide letter dated 15.07.2025, the importer had requested for re-export of goods which was allowed on payment of Redemption Fine of Rs. 39,00,000/- vide Order in Original dated 06.11.2025. The Additional Commissioner of Customs, Mundra also imposed penalty of Rs. 18,00,000/- on the importer under Section 112(a)(i) of the Customs Act, 1962. * The respondent's request for clearance of goods for home consumption is not allowable as the imported goods are prohibited without any valid BIS license. He distinguishes decision in case of M/s Shiv Shakti Trading Company on the ground that no adjudication order was passed in that case even after a period of 1 year from the seizure date whereas here, matter has already been adjudicated in less than 4 months from the respondent's request dated 14.07.2025 for re-export of the goods. 7. We have gone through the records and various submissions made by both the sides. We find that the department has filed appeal against Commissioner (Appeals)'s order, who on the basis of non-issuance of show cause notice or adjudication within six months from the seizure date of 20.02.2025, vacated the seizure and ordered release of the goods. The goods h....
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....ized: Provided that the Principal Commissioner of Customs or Commissioner of Customs may, for reasons to be recorded in writing, extend such period to a further period not exceeding six months and inform the person from whom such goods were seized before the expiry of the period so specified. 5.6 A plain and literal interpretation of this provision reveals several critical aspects : a) The use of the word 'shall' ('shall be returned') signifies that the provision is mandatory, not directory or discretionary. It casts a statutory obligation upon the department b) the provision provides a specific and dire consequence for inaction: the automatic release of the goods c) The legislatures intent is clear to balance the State's power of investigation with the citizen's right to property. It serves as a crucial safeguard against the executive holding onto seized property indefinitely without initiating adjudication. d) The statute provides only one, and only one, mechanism to overcome this six-month deadline: a formal extension by the Principal Commissioner or Commissioner, for reasons to be recorded in writing,....
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....is judgment is that the waiver of an SCN does not absolve the department of its duty to adjudicate within the "reasonable period", which is six months. The waiver and the time limit are linked: the department is expected to honor the quid pro quo of the waiver by completing the adjudication within that six-month period. If it fails, the waiver becomes ineffective, and the statutory consequence of Section 110(2) takes full effect. 5.11 This principle has been consistently upheld and has been adopted by the jurisdictional Hon'ble CESTAT Ahmedabad, in METCO EXPORT INTERNATIONAL Versus COMMISSIONER OF CUSTOMS, KANDLA [2019 (370) E.LT. 392 (Tri. Ahmd.)]. In this case, the Tribunal, while following the Shiv Shakti (supra) judgment, held: "6 In our considered view, that fact will not matter for the reason that Hon'ble High Court has decided the issue on the basis that the adjudication should have been completed within the reasonable period, therefore, the difference of this fact will not have any impact in applicability of this judgment in the present case. Accordingly, following the judgment of Hon'ble High Court as cited above, we set aside the impugned ord....
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....As a consequence of the seizure becoming illegal after 27.08.2025, the goods are liable to be returned to the Appellant forthwith. The confiscation of the goods, imposition of Redemption Fine, and penalty are set aside. The goods shall be released within 7 days of the receipt of this order." 7.1 Feeling aggrieved by the order which gives relief on the ground that show cause notice was not issued within 6 months from seizure date by following the decision of Hon'ble High Court of Delhi in ShivShakti Trading Company Vs. Commissioner of Customs (Preventive) reported at 2016 (336) ELT (415) (Del.) the Revenue has filed this appeal. We find that Commissioner following the above decision gave relief by allowing imported goods to be released without any fine, penalty etc. The relevant para 23 to 25 of the decision in Shivshakti case are reproduced below:- "23. Considering that the time limits for issuance of an SCN In terms of Section 110(2) are sacrosanct, If at the time of seizure of the goods there is waiver by the person from whom the goods were seized, or the owner of the right to be given an SCN, in the expectation of an expedited adjudication, then the reasonable time w....
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....provisionally whereas, in the present case goods had been released provisionally. 6. In our considered view, that fact will not matter for the reason that Hon'ble High Court has decided the issue on the basis that the adjudication should have been completed within the reasonable period, therefore, the difference of this fact will not have any impact in applicability of this judgment in the present case. Accordingly, following the judgment of Hon'ble High Court as cited above, we the impugned order and allow the appeal." 7.3 We find that the decision in respect of goods cannot be faulted with in the instant case and the seizure gets vacated if show cause notice is not issued within the statutory limits of six months provided in Section 110. The view is fortified by the decision in the matter of Deepak Metal alloys Vs. UOI as reported in 2019 (368) ELT 47 (Guj.). It is thus clear that even when show cause notice is waived in view of the decision of Hon'ble Delhi High Court in M/s. Shiv Shakti (cited supra), the proceedings are required to be more expeditiously concluded and adjudication cannot be delayed beyond six months and the waiver given will no more be bindi....
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....nto the country must be having BIS license / certification and accompanied with Mill Test Certificate and be marked with ISI and BIS license number. For smooth implementation of the Quality Control Order, the Ministry of Steel has constituted a Technical Committee (w.e.f. October 2018) for examination and analysis of the application(s) received for issuance of clarification, whether the product(s) which are being imported without BIS certification are covered under Steel QCO or not. For issuing of the said clarifications to the steel importers, the Ministry of Steel has launched a dedicated portal, known as TCQCO Portal (https://toqoo.steel.gov.in/tc-qco) w.e.f. August 2020, It is mandatory for all the steel importers to apply and seek clarification on the aforesaid dedicated portal for each & every steel consignment which is imported in the country without BIS license/ certification. It is clarified that the Ministry of Steel issues clarification for each single import consignment. In this regard it is further clarified for each & every consignment the importer need submit fresh application through TCQCO portal, unless stated otherwise in the clarificati....
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....n on the issue was given vide reply dated 28.02.2025 as under:- "the Initial decision to grant a one-time NOC/exemption for steel Imports applied only to cases where the steel had already arrived at Indian ports or the Master Bill of Lading had been generated on or before December 3, 2024. This one-time provision was closed on December 21, 2024," Above, therefore wrongly led the department to believe that the goods were imported despite restriction and therefore, their release in India was improper. 7.8 We find that the same has been vehemently and correctly opposed by the Advocate for the respondent, on the ground that for Grade J2, department has not been able to show that under which Control Order of the Ministry of Steel i.e. the Steel and Steel products (Quality Control Order) any restriction was applied on the 'Cold Rolled Stainless Steel Coils Grade J2'. There is nothing on record to show that BIS standards have been applied for the above goods which can only be prescribed under laid down procedure under World Trade Organization (W.T.O.) in relation to technical standards to be prescribed on the principles of equal treatment to all the countries at the import ....
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.... Continental (India) (cited supra) to support the proposition that department by issuing a circular cannot add new conditions to the notification thereby restricting the scope of a notification or whittling it down. * Atul Commodities Pvt. Ltd. Vs. Commissioner of Customs, Cochin 2009 (235) ELT 385 (SC) which emphasized that DGFT is empowered to interpret policy. It cannot change categorisation of the goods from free to restricted which power is vested in the legislature only. * Kerneos India Aluminate Tech. Pvt. Ltd. Vs. Union of India, (cited supra) which held that till the time, for a commodity BIS standard has been notified, the same cannot be applied to goods imported. * South Gujarat Warp Knitters Association Vs. Union of India, 2025 (391) E.L.T. 76 (Guj.), which held that the DGFT had no power to amend/ update foreign trade policy itself and its power is restricted to interpret procedures laid down. * Intolcast Pvt. Ltd. v. Union of India, 2017 (345) E.L.T 217 (Guj.) which held that in the guise of clarification, any entry cannot be amended by DGFT in the Exim policy. 7.11 He also pointed out that the circular dated 20th November, 2025,....
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....liance report be filed, if required, by the Customs Department. 4. Today, Mr. Harpreet Singh, Ld. SSC for the Respondents submits that the goods of the Petitioner have been released and that there is no consignment which is pending to be released. Ld. Counsel for the Petitioner confirms the same. 5. Considering the above, in the interim applications being CM APPL. 71264/2024 and CM APPL.76571/2024 no further orders are called for." It is thus clear that the goods are not prohibited and are liable to be released in India as the Learned Commissioner (Appeals) has ordered. We therefore, find no infirmity in the order but are refraining from pronouncing on whether the Circular by the Ministry of Steel was issued under due authority of law or extended the scope of the restrictions without the statutory authority. While department emphasized that action in personam will still survive, after release of goods. We find that it can only be pressed by the department, if it finds tangible violations of some law prescribing and making such imports restricted and prohibited only on the basis of BIS standards or a statutory Control Order and not without such conclusion. Appea....