2021 (4) TMI 526 - HC - Customs

Benefit of advance authorisations - provisional release of seized goods - seeking assessment of Bills of entry - drawing samples of the goods in the containers to have tested at a laboratory - goods misdeclared or not - HELD THAT - It appears that samples had accordingly been sent to one laboratory M/s. Geo Chem Laboratory and once again to JNCH laboratory, and that test results have also been known. With reference to the same, several contentions are being advanced on either side, including there is a request on behalf of the petitioner to draw samples once again contending that third portion of sample is not supplied to petitioner and to have tests carried as suggested by them, purporting to emphasize that in several tests can be carried out by which results would not be same, as contended by the revenue. There are several matters in dispute between parties, viz. petitioner and respondents. Petitioner claims that imported goods undergo certain process, which is a manufacturing process, whereas test reports and factual position contended by the other side has been stated to be otherwise. In such disputed scenario, it is not be a case where it can be said that the revenue department is acting without powers or authority having regard to provisions referred to - It would be pertinent to refer that IEC Code No. 0388007737 has not been blocked and it is only to be on alert. So far as request for drawing further samples from seized goods is concerned, it is for the petitioner to make a proper approach. It would be expedient that the concerned authorities proceed with the assessment process as early as possible - petition dismissed.

Issues Involved:
1. Assessment of Bills of Entry and Clearance of Imported Goods
2. Seizure of Goods and Alleged Misuse of Advance Authorisations
3. Blocking of IEC Code and Non-issuance of Test Reports
4. Provisional Release of Seized Goods and Security Measures
5. Jurisdiction and Authority of Revenue Department Actions

Detailed Analysis:

1. Assessment of Bills of Entry and Clearance of Imported Goods:
Petitioners sought a mandamus to compel the respondents to assess the Bills of Entry for imported goods and permit their clearance without duty, extending the benefit of Notification No. 18/2015-Cus. The petitioner argued that they regularly import "Eucalyptol Oil" and "Eucalyptus Oil" for manufacturing export products and have been issued advance authorisations by the DGFT. However, the respondents alleged that the petitioner was misusing these authorisations by exporting the same imported goods without any manufacturing activity, thus evading customs duty.

2. Seizure of Goods and Alleged Misuse of Advance Authorisations:
The respondents conducted searches and seized goods under the belief that the petitioner was mis-declaring goods to claim undue benefits under the advance authorisation scheme. They cited sections 111(m) and 111(o) of the Customs Act for the confiscation of goods. The petitioner contested the seizure, asserting that the goods undergo a manufacturing process and that the seizure was based on incorrect beliefs and non-application of mind.

3. Blocking of IEC Code and Non-issuance of Test Reports:
The petitioner claimed that their IEC code was blocked, preventing the assessment of Bills of Entry, and that they were not provided with test reports or copies of panchanamas. The respondents clarified that an alert, not a block, was placed on the IEC code to ensure examination and sampling of goods before clearance. They also contended that test reports would be provided at the time of the show-cause notice.

4. Provisional Release of Seized Goods and Security Measures:
The petitioner requested the provisional release of seized goods on executing a PD bond without security. The respondents opposed this, citing the petitioner's misrepresentation and manipulation, which could lead to the cancellation of advance authorisations and strict action. They referred to CBIC Circular No. 35/2017, which mandates a bond and security deposit for the provisional release of seized goods.

5. Jurisdiction and Authority of Revenue Department Actions:
The respondents defended their actions, stating that the searches and seizures were conducted within their jurisdiction and authority under the Customs Act. They argued that the petitioner imported goods under false pretenses, violating the conditions of the advance authorisation and Notification 18/2015, thus justifying the seizure and subsequent actions.

Conclusion:
The court found that there were several disputed matters between the petitioner and the respondents, particularly regarding the manufacturing process and the nature of the imported goods. The court held that the revenue department acted within its powers and dismissed the writ petition. The court also noted that the IEC code was not blocked but on alert, and suggested that the petitioner make a proper approach for drawing further samples if needed. The assessment process was to proceed expeditiously, and the writ petition was disposed of accordingly.

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