2022 (7) TMI 80 - HC - Customs

Seeking provisional release of seized imported consignments - unflavoured supari (Betel Nut Product) - perishable goods or not - to be classified under Chapter-8 Entry 0802 80 or not - Section 110A of the Customs Act, 1962. Whether the products fall under Chapter 8 satisfying the definition of whole/split/ground/any other form of Areca nut or Chapter 21, being, betal nut product known as supari? HELD THAT - No doubt, the provisions of Section 110A provide for provisional release upon terms to be imposed by the authority. However, the provisions of Section 125, that deals with 'option to pay fine in view of confiscation' provides for two situations. In the case of confiscation of prohibited goods, the option to pay fine in lieu of confiscation is discretionary, such discretion to be exercised by the authority - It is only in the case of other goods, that are not prohibited, that the Officer shall offer to the owner or the person from whose possession the goods were seized, an option to pay a fine, in lieu of confiscation. Thus, in the case of prohibited goods, the discretion as to whether fine may be imposed in lieu of confiscation is that of the officer concerned. Having said so, it is incumbent upon the authority to be prompt in exercise of such discretion, particularly in the case of perishable goods such as the commodity in question. The consignments are in the Customs Station since February 2022 and have been exposed to inclement weather and the vagaries of nature. Though some of the petitioners have already made applications for provisional release under Section 110A of the Act, they wish to update their representations in view of events that have transpired in the recent past. All petitioners are permitted to make applications for provisional release under Section 110A and such applications as/if and when received shall be disposed by the adjudicating authority after hearing the petitioners and simultaneous with a prima facie determination of the classification of the commodity in each case, within a period of two (2) weeks from date of receipt of the applications. Petition disposed off.

Issues:
1. Impleadment of Customs authorities in writ petitions.
2. Seizure of unflavoured Supari consignments by Customs authorities.
3. Classification dispute under Customs Act between Chapter-8 and Chapter-21.
4. Provisional release applications under Section 110A of the Customs Act.
5. Discretionary powers of the authority in confiscation of goods.
6. Prompt exercise of discretion in cases of perishable goods.
7. Application for provisional release based on recent events.
8. Reversal of classification order by the Appellate Authority.
9. Prima facie determination of classification and provisional release.
10. Compliance with Circular No.22/2004-Cus. for release of disputed consignments.

Analysis:
1. The High Court refused to entertain the Customs authorities' impleadment petitions, deeming their presence unnecessary in the ongoing cases involving the seizure of unflavoured Supari consignments imported by various petitioners. The petitioners sought relief through writ petitions challenging the seizure memoranda issued by the Customs authorities.

2. The petitioners contested the classification of their consignments under Chapter-8 by the Customs authorities, arguing that the products should be classified under Chapter-21 as "Food preparations not elsewhere specified or included." The value of the imported goods was below the threshold set for freely importable products under Notification No.20/2015-2020, potentially categorizing them as prohibited goods.

3. The Court noted the classification dispute between Chapter-8 and Chapter-21, emphasizing the need for a detailed examination to determine the correct classification of the imported goods. The petitioners presented certificates from the Food Safety and Standards Authority of India to support the edibility and safety of the imported products.

4. The judgment highlighted the provision for provisional release under Section 110A of the Customs Act, emphasizing the discretionary powers of the authority in confiscation cases, especially concerning prohibited goods. The Court stressed the importance of prompt decision-making, particularly for perishable goods like the Supari consignments in question.

5. The Court referenced a previous case where the Appellate Authority reversed the classification order, emphasizing the need for a fair and thorough assessment of the goods. The judgment allowed all petitioners to apply for provisional release under Section 110A, with a two-week timeline for the authority to determine the classification and decide on release.

6. In line with Circular No.22/2004-Cus., the Court directed the authorities to follow procedures for disputed consignments, ensuring timely release unless import or clearance is prohibited by law. The judgment concluded by disposing of the writ petitions without costs, emphasizing compliance with the circular for the release of disputed consignments.

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