2013 (10) TMI 63 - HC - Customs

Import of Construction Sand - The only case of the Customs Department for detaining the consignment was for want of Plant Quarantine Certificate - There was no allegation with regard to any infringement of the Customs Act as to the mis-declaration or otherwise or as to the absence of any valid licence for the import, but for branding the import as illegal under Section 11A of the Customs Act Held that - even the Plant Quarantine Order enables relaxation of the conditions of the Import Permit under Chapter VI - Sub Clause 1 of Clause 14 enables the Central Government to relax any of the conditions of the Order relating to the import permit, which is to be exercised, in public interest, by the Joint Secretary in charge of the Plant production in the Department of Agriculture & Cooperation, who had been designated as the Competent Authority. Sub Clause 2 of Clause 14 stipulates that, in the event of grant of relaxation by the Competent Authority, the consignment shall be released, after charging fee for import permit and the fee for Plant Quarantine inspection at five times of normal rates - The fee and such other particulars were given under Schedule IX - Whether this Clause will be applicable itself, was a matter to be looked into and decided in the course of adjudication proceedings and as such, no opinion was being expressed by this Court for the time being. Since it was admitted that, there was no loss of revenue, further liability of the petitioner, if any, can be finalised in the course of adjudication proceedings - But for that matter, the Court finds that the goods need not be detained any longer - Accordingly, there will be a direction to the respondents to release the goods to the petitioner forthwith, at any rate within two weeks from the date of receipt of a copy of this judgment - Since the quantum payable to have the goods released issued by the fourth respondent was not brought on record, the Court reckons the same as five times of the amount payable as given in Schedule IX to the Plant Quarantine Order - The goods shall be released to the petitioner as above on payment of the requisite amount and also on executing a Bond for meeting the balance liability, if any, subject to adjudication proceedings - On receipt of the same, adjudication proceedings shall be finalised by the first respondent in accordance with law, as expeditiously as possible, at any rate within one month thereafter.

Summary

Issues Involved:
1. Detention of consignment for want of Plant Quarantine Clearance.
2. Applicability of Plant Quarantine Order to Construction Sand.
3. Legality of the show-cause notice for confiscation under Section 111(d) of the Customs Act.
4. Requirement and implications of Plant Quarantine Clearance.
5. Compliance with Foreign Trade Policy and Customs Tariff Act.

Issue-Wise Detailed Analysis:

1. Detention of Consignment for Want of Plant Quarantine Clearance:
The petitioner, a registered company, imported construction sand from Cambodia, which was detained by Customs for lack of Plant Quarantine Clearance. The petitioner argued that the import was classified under EXIM Code 2505 as a "free" item under the Foreign Trade Policy 2009-14, requiring no conditions for import. Despite this, the Customs Department issued a restraint order and demanded Plant Quarantine Clearance, leading to the detention of the consignment.

2. Applicability of Plant Quarantine Order to Construction Sand:
The Plant Quarantine (Regulation of Import into India) Order, 2003, framed under the Destructive Insects and Pests Act, 1914, regulates the import of agricultural articles. The definitions of "consignment," "import," "plant," "plant product," "regulated article," and "soil" were scrutinized. The court noted that construction sand does not fall under the scope of the Plant Quarantine Order unless it is characterized as "soil" supporting plant life. The Customs Department's concern was the purpose of the sand, which needed to be analyzed under Clause 4 of the Plant Quarantine Order.

3. Legality of the Show-Cause Notice for Confiscation under Section 111(d) of the Customs Act:
The petitioner received a show-cause notice proposing confiscation under Section 111(d) of the Customs Act for alleged violation of the Plant Quarantine Order. The court observed that the only reason for detention was the absence of a Plant Quarantine Certificate, with no allegations of mis-declaration or lack of a valid import license. The court emphasized that the adjudication of whether the sand is "soil" under the Plant Quarantine Order is pending, and the show-cause notice's legality will be determined accordingly.

4. Requirement and Implications of Plant Quarantine Clearance:
The petitioner argued that construction sand is not "soil" as defined in the Plant Quarantine Order and thus does not require a Plant Quarantine Certificate. The court noted that the petitioner is a trader, not a construction company, and cannot control the sand's end use. The court highlighted the necessity of construction sand for projects like the Kochi Metro Rail Project and the state's policy to promote sand import due to local scarcity. The petitioner also pointed out previous instances of sand imports without Plant Quarantine Certificates, which the respondents did not refute.

5. Compliance with Foreign Trade Policy and Customs Tariff Act:
The court examined the Foreign Trade Policy 2009-14, which lists construction sand under EXIM Code 2505 as a "free" import item. The court noted that the policy does not impose Plant Quarantine Clearance for such imports, unlike other restricted items. The court concluded that in the absence of specific restrictions under the Customs Tariff Act or Foreign Trade Policy, the petitioner's import should not be detained.

Conclusion:
The court directed the respondents to release the detained consignment within two weeks, subject to the petitioner paying five times the inspection/fumigation fees and executing a bond for any additional liability. The court also instructed the respondents to finalize the adjudication proceedings within one month, allowing the petitioner to submit a detailed explanation to the show-cause notice. The writ petition was disposed of accordingly.