2021 (6) TMI 622 - AT - Customs

Classification of imported goods - Pottassium Humate - classifiable under CTH 31052000 or otherwise? - import of goods was denied by the Customs on the ground that it is a restricted item and requires registration from the Central Insecticide Board and Registration Committee - HELD THAT - Both the authorities have relied upon the test report issued by the Customs Department but the same does not conclusively classify the impugned goods as insecticide. The test report of the Customs only says that it may find use as a plant growth regulator and on that basis, the Customs changed the classification and reclassified the goods under CTH 38089340 which is also not tenable in law in view of the letter dt. 05.11.2020 issued by the Central Insecticide Board and Registration Committee. In the present case, the Assistant Commissioner of Customs passed the order on 05.10.2020 but did not provide the copy of the same to the appellant in spite of the best efforts of the appellant to get the copy. Further the Assistant Commissioner issued the said order only on 11.11.2020 as stated in the order itself, which means after more than one month and in the meantime compelled the appellant to deposit the penalty amount which was deposited by the appellant on 06.10.2020 even without the issuance of the order by the original authority - there are no justification for issuing the order by the Assistant Commissioner after the expiry of more than one month when there is a live consignment involved in this case. The impugned items is not included in the Schedule under the Insecticide Act, 1968 and hence it is not required registration - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Classification of imported goods under Customs Act, 1962; Confiscation of goods under Section 111(d) of the Customs Act, 1962; Penalty imposed under Section 112(a) of the Customs Act, 1962; Failure to provide copy of order by Assistant Commissioner; Justification for penalty deposit without order issuance.

Classification of Imported Goods:
The appellant imported goods declared as "Pottassium Humate" and "seaweed extract NPK water soluble fertilizers" but faced classification issues by the Customs Department. The authorities reclassified the items under different headings based on laboratory test results. However, the Central Insecticide Board confirmed that "Pottassium Humate" did not fall under the Insecticides Act, contradicting the Customs' classification. The Tribunal found the Customs' reclassification untenable in law due to the Board's confirmation.

Confiscation and Penalty Imposition:
The Customs confiscated the goods under Section 111(d) of the Customs Act, 1962, citing violation of import policy conditions. Additionally, a penalty of ?25,000 was imposed under Section 112(a) of the Act. The appellant contested the confiscation, arguing that the goods were not insecticides and did not require registration. The Tribunal noted the lack of conclusive evidence labeling the goods as insecticides and overturned the confiscation, directing the release of the goods and refund of the penalty amount.

Failure to Provide Copy of Order and Penalty Deposit:
The Assistant Commissioner's delay in issuing the order and failure to provide a copy to the appellant raised procedural concerns. Despite the appellant's efforts, the order was issued after a significant delay, leading to confusion regarding the penalty deposit made by the appellant. The Tribunal criticized the delay in issuing the order, especially concerning a live consignment, and directed the Assistant Commissioner to release the goods and return the penalty amount due to the procedural irregularities.

This detailed analysis of the judgment highlights the issues related to the classification of imported goods, confiscation, penalty imposition, procedural lapses, and the Tribunal's decision based on the arguments presented by both parties and the legal provisions under the Customs Act, 1962.