2017 (1) TMI 342 - AT - Customs

Confiscation of imported goods - Requirement of certificate of registration from Central Insecticide Board or Certificate of end use from the concerned Ministry/ department of Government of India - import of boric acid - classification of goods - classified under CTH 2810 or CTH 3808 - Held that - as per ITC (HS), the boric acid is specifically classified under CTH 2810, which is freely importable. End use of product relevant to determine whether registration certificate required or not? - it can be seen in the committee meeting of Krishi Bhawan in chairmanship of Agricultural Commissioner that the concerned Ministry is of the opinion that if boric acid is used for non-insecticidal purpose, no registration is required under the Insecticide Act, 1968. In other case, however, it may necessary to obtain registration. In the instant case, the imports have been made by the Traders and it is not clear that the boric acid imported have been used for insecticidal purpose. In such circumstances, importation of boric acid may not require registration from the concerned authorities under the Insecticide Act, 1968. Confiscation and penalty not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Classification of Boric Acid under Customs Tariff.
2. Applicability of Circular No. 61/2004.
3. Requirement of registration or end-use certificate under the Insecticide Act, 1968.
4. Validity of confiscation and penalty imposed by the adjudicating authority.

Detailed Analysis:

1. Classification of Boric Acid under Customs Tariff:
The primary issue revolves around the classification of Boric Acid. The appellant argued that Boric Acid should be classified under Chapter 2810, which is freely importable, rather than under Chapter 3808 as an insecticide. The Tribunal referred to the ITC (HS) and previous case law, particularly the Hardware Trading Corporation case, which emphasized that Boric Acid is predominantly used as a raw material and falls under Heading 28.10. The Tribunal noted that the HSN Explanatory Notes, which are a safe guide for interpreting tariff entries, do not classify Boric Acid as an insecticide. Therefore, the Tribunal concluded that Boric Acid should be classified under Chapter 28.10.

2. Applicability of Circular No. 61/2004:
The appellant contended that Circular No. 61/2004, which requires a certificate of registration or end-use certificate for Boric Acid, is not applicable. The Tribunal agreed, stating that the Circular cannot override the provisions of the Customs Tariff Act. The Tribunal also referenced the Union of India Vs. Maliakkal Industries Enterprises case, which held that executive orders like Circulars cannot impose restrictions on rights available under the Policy Act. Since the shipment was made before the issuance of the Circular, the Tribunal found that the Circular was not applicable in this case.

3. Requirement of Registration or End-Use Certificate under the Insecticide Act, 1968:
The Tribunal examined whether Boric Acid, being listed in the Schedule to the Insecticide Act, 1968, required registration. The Tribunal noted that the Registration Committee had exempted Boric Acid imported for non-insecticidal use from registration requirements. The Tribunal found no evidence that the imported Boric Acid was used for insecticidal purposes. Therefore, the Tribunal concluded that registration under the Insecticide Act was not required for the appellant's import.

4. Validity of Confiscation and Penalty:
Given the findings on the classification and the non-applicability of the Circular and registration requirements, the Tribunal held that the confiscation of the goods and the penalty imposed by the adjudicating authority were not sustainable. The Tribunal noted the lack of evidence to support the claim that the Boric Acid was used for insecticidal purposes, which would have necessitated registration. Consequently, the Tribunal set aside the adjudicating authority's order and allowed the appeal with consequential reliefs.

Conclusion:
The Tribunal concluded that Boric Acid is classifiable under Chapter 28.10, the Circular No. 61/2004 was not applicable, and no registration under the Insecticide Act was required for the appellant's import. Therefore, the confiscation and penalty imposed by the adjudicating authority were not justified, and the appeal was allowed with consequential reliefs.