2015 (12) TMI 477 - HC - Customs

Constitutional validity of Circular - Prohibition on import of Alloy Steel of Deformed Bars/ Deformed Bars - whether ultra vires Articles 14, 19(1)(g) and 300A of the Constitution of India - Circular No.450/176/2014CustIV dated 7th November, 2014 - goods falling under Chapter Heading 72.28 of CTA - Held that - The statement of objects and reasons to the BIS Act reveals as to how a national strategy for according appropriate recognition and importance of standards is to be evolved and integrated with the growth and development of production and export in various sectors of the national economy. That is why all the sectors have to intensify efforts to produce more and more standard and quality goods so as to help in inducing faster growth, increasing exports and making available goods to the satisfaction of the consumers. Towards this end, the Act has been enacted and the terms have been defined. Ministry of Steel has urged that imports circumventing the said Steel Products Quality Control Order, 2012 should stopped in view of their damage to the interest of the Indian Steel industry as well as from the angle of safety of infrastructure and housing projects in the country. They have to necessarily meet with the specifications set out in the standards and have to bear the standard mark of the BIS. This is apparent from reading of Foreign Trade Policy, 2009-2014, ITC (HS), 2012. The Import Policy and General Notes regarding import policy, whereunder it is stipulated that all goods imported into India are subject to mandatory Indian Standards as notified. Standard devised for high strength deformed steel bars and wires for concrete reinforcement specification will have to be complied with. Mr. Nankani could not dispute that the schedule and which is styled as the Steel and Steel Products (Quality Control) Second (Amendment) Order, 2014 made by the Central Government under section 14 of the BIS Act, 1986 sets out the Indian standard number, the title of the goods and date of coming into force of the product standard to the extent set out therein. The ITC (HS) Code is for reference purposes. It also indicates as to how the title listing the steel products has to be construed and with reference to the ITC (HS)Code. The standards have to be complied with and from the dates mentioned therein. Circular in no way prohibits the Petitioners from importing the goods. The same does not hold up unnecessarily the consignments. We are also not in agreement with the Petitioners that the Circular is based on irrelevant, extraneous and nongermane considerations. The circular is also not discriminatory or malafide. It is not ignoring any of the provisions of law. The Circular does not violate the mandate of Article 19(1)(g) of the Constitution of India or 300A of the Constitution of India - Decided against assessee.

Summary

Issues Involved:
1. Constitutionality and validity of Circular No.450/176/2014CustIV dated 7th November 2014.
2. Authority of the Central Board of Excise and Customs (CBEC) and Ministry of Steel to issue the impugned Circular.
3. Applicability of Bureau of Indian Standards (BIS) certification to imported goods.
4. Allegations of discrimination and mala fide intentions in the issuance of the Circular.
5. Compliance of imported goods with Indian standards and laws.

Detailed Analysis:

1. Constitutionality and Validity of Circular No.450/176/2014CustIV dated 7th November 2014:
The Petitioners challenged the Circular as unconstitutional and ultra vires Articles 14, 19(1)(g), and 300A of the Constitution of India and the Bureau of Indian Standards Act, 1986. They argued that the Circular was arbitrary, unreasonable, and based on irrelevant considerations. The Court, however, found that the Circular was issued to ensure that imported goods comply with Indian quality standards, specifically BIS standards, which are necessary for public safety and health. The Court held that the Circular did not violate any constitutional provisions and was not discriminatory or mala fide.

2. Authority of the Central Board of Excise and Customs (CBEC) and Ministry of Steel to Issue the Impugned Circular:
The Petitioners contended that the CBEC and Ministry of Steel lacked the authority to issue the Circular. The Court disagreed, stating that the CBEC, under the Customs Act, 1962, has the power to issue such Circulars to ensure compliance with domestic laws and standards. The Court emphasized that the Circular was issued to caution customs officers about the quality standards of imported goods, which is within the CBEC's mandate.

3. Applicability of Bureau of Indian Standards (BIS) Certification to Imported Goods:
The Petitioners argued that their imported goods, classified as alloy steel, were not covered under the Steel Quality Control Order and thus did not require BIS certification. The Court found this argument misconceived, stating that the BIS standards apply to both alloy and non-alloy steel. The Court emphasized that all imported goods must comply with Indian standards, regardless of their classification under the ITC (HS) codes. The Court upheld the Circular's requirement for BIS certification for the imported goods.

4. Allegations of Discrimination and Mala Fide Intentions in the Issuance of the Circular:
The Petitioners alleged that the Circular was issued with mala fide intentions to favor certain manufacturers and discriminate against them. The Court found no evidence to support these allegations. The Court noted that the Circular was issued in the public interest to ensure the safety and quality of imported goods used in construction and infrastructure. The Court held that the Circular was neither arbitrary nor discriminatory.

5. Compliance of Imported Goods with Indian Standards and Laws:
The Court emphasized that all imported goods must comply with Indian standards and laws, including the BIS standards. The Court noted that the Foreign Trade Policy and the ITC (HS) classification system require imported goods to meet domestic quality standards. The Court found that the Circular was issued to enforce this compliance and was thus valid and legal.

Conclusion:
The Court dismissed the Writ Petitions, upholding the validity of Circular No.450/176/2014CustIV dated 7th November 2014. The Court ruled that the Circular was issued within the authority of the CBEC and Ministry of Steel, was necessary to ensure compliance with BIS standards, and did not violate any constitutional provisions. The Court found no merit in the Petitioners' allegations of discrimination and mala fide intentions. The Court concluded that all imported goods must comply with Indian standards and laws to ensure public safety and quality.