2022 (5) TMI 816 - HC - Customs

Seeking release of consignment - Hexane Liquid Chemical - argument is that once the Hexane Liquid Chemical is imported for Industrial purpose, it shall be utilized for Industrial purpose only - HELD THAT - An interim order is passed for release of the consignment subject to the certain terms and conditions - The writ applicants shall ensure that the Hexane, which they have imported shall be used only for the industrial purpose. The writ applicants shall undertake to allow the Customs Department to inspect the books and records as well as the actual use of the Hexane as and when required. The respondents Nos.2 and 3 respectively are directed to assess the bills of entry for import of Hexane and permit clearance for home consumption of Hexane or for warehousing, as the case may be, subject to the aforesaid terms and conditions. It goes without saying that this interim arrangement shall be subject to the final outcome of the writ applications - Post this matter on 03.08.2022.

Summary

Issues:
1. Determination of the nature and purpose of imported Hexane Liquid Chemical.
2. Verification of the laboratory test results and certification regarding the imported Hexane.
3. Decision on releasing the imported consignment of Hexane subject to conditions.

Analysis:
1. The Court addressed the issue of determining the nature and purpose of the imported Hexane Liquid Chemical, which was claimed to be for Industrial purpose by the writ applicants but certified as Hexane for Food Grade purpose by the CRCL, Vadodara. The Court sought clarity on whether the same Hexane Liquid Chemical could be used for both Industrial and Food Grade purposes. It directed CRCL to file an affidavit with test reports to explain the basis of their certification, emphasizing the need to distinguish between the two types of Hexane products.

2. The Court received an affidavit from Dr. Manoj Nagariya, the Chemical Examiner Gr.II at the Central Excise & Customs Laboratory, Vadodara, confirming that the samples met the requirements for Hexane, Food Grade as per Indian Standard 3470:2017. The affidavit highlighted that while the imported Hexane could be used for Industrial purposes, the laboratory's report indicated compliance with Food Grade standards. The concern raised was the potential diversion of Industrial-use Hexane for Food Grade purposes, necessitating a clear understanding of the import consignments' intended use.

3. After considering the submissions and the significant value and quantity of the imported Hexane consignment, the Court decided to pass an interim order for the release of the consignment under specific terms and conditions. These conditions included ensuring the Hexane's use solely for Industrial purposes, allowing Customs inspections, submitting a certificate from the Statutory Auditor confirming consumption in the manufacturing process, executing end-use bonds and legal undertakings, with breach leading to actions under the Customs Act, 1962. The release was subject to assessment by the respondents and post interim arrangements, with a further hearing scheduled for August 3, 2022.