2021 (7) TMI 169 - HC - Customs

Seeking release of seized goods - two-sided coated paper in rolls - whether the importer has made out a prima facie case for clearance of the goods with or without any conditions? - HELD THAT - The learned Writ Court could not be justified in rendering a finding, which will have a direct impact on the adjudicatory process. To be noted that the respondent-writ petitioner did not approach the Court for direction to the appellants to consider their case for provisional release of the imported consignment and that such a request was kept pending for a prolonged period. Nor it is the case of the respondent that any order was passed by the Department either accepting the request for provisional release with or without conditions or rejecting the request for provisional release. Since the prayer sought for by the respondent-writ petitioner was for issuance of an innocuous relief, the Court was required to confine itself to the relief sought for and not traverse beyond the boundaries, which will have impact on the adjudication process. The argument of the learned counsel appearing for the respondent-importer is that at the first instance, the item description as mentioned against EXIM Code 4810 has to be looked into before going into the sub-items, one of which is 4810 13 19, under the category 'Other' and if the EXIM Code 4810 is taken into consideration, the different size and GSMs will not bring the import within the meaning of different description under Clause-2(d) of the clarification - it is considered to be too early for the Writ Court to express any opinion on the issue, because, adjudication is yet to commence. However, taking out of the fact that paper of all categories which has been mentioned under EXIM Code 4810 is freely importable and only issue would be whether the import effected by the respondent is a Stock Lot or not is to be decided. The imported goods may be directed to be released subject to the condition that importer give an undertaking to participate in the adjudication to be done by the appellant-Department - Appeal allowed in part.

Summary

Issues:
1. Appellants challenging the order for release of imported goods.
2. Examination of whether the importer established a prima facie case for release of goods.
3. Classification of imported goods under EXIM Code 4810.
4. Interpretation of Trade Notice No.8/2020-2021 regarding 'Stock Lot' imports.
5. Dispute over the nature of the imported consignment.
6. Justification for detention and seizure of goods by the Department.
7. Legal validity of the relief granted by the Writ Court.
8. Direction for release of goods subject to adjudication process.

Analysis:
The High Court of Madras addressed the appeals filed by the Commissioner of Customs against a Writ Court order directing the release of imported goods. The Writ Court's decision was challenged as it exceeded the relief sought by the importer, which impacted the adjudicatory process. The Court emphasized that the Writ Court should have focused solely on whether the detention/seizure of goods was justified based on a prima facie case for clearance. Therefore, the findings of the Writ Court on the merits were vacated, and the matter was to be examined based on the importer's prima facie case for release pending adjudication.

The dispute arose from the classification of the imported paper under EXIM Code 4810, specifically regarding whether it constituted a 'Stock Lot' import prohibited after an amendment in 2017. The Department contended that the imported goods fell under 'Stock Lot' due to different sizes and GSMs, making it a prohibited import. The importer argued that the goods did not meet the criteria for 'Stock Lot' under the Trade Notice, and the classification under EXIM Code 4810 allowed for free importation of the goods.

The Court acknowledged that it was premature to make a final determination on the issue as adjudication was pending. However, considering the importability of all categories under EXIM Code 4810, the Court directed the release of goods subject to the importer's undertaking to participate in the adjudication process. The Court allowed the Writ Appeals in part, directing the appellants to release the consignment within a specified timeframe after initiating the adjudication process. Additionally, the Court waived the detention charges due to the prolonged detention of the goods since January 2021.

In conclusion, the High Court's judgment balanced the importer's right to seek release of goods with the need for a thorough adjudication process to determine the nature of the imported consignment under the relevant regulations and classifications. The decision emphasized the importance of following due process while ensuring timely resolution of disputes related to customs and import regulations.