1990 (3) TMI 86 - HC - Customs

Almonds in-shell - Jurisdiction - Customs authorities jurisdiction - Confiscation - Classification of goods

Summary

Issues Involved:
1. Classification of almonds under Customs Laws.
2. Validity of REP (replenishment) licence for importing almonds.
3. Jurisdiction of Customs Authorities versus Licensing Authorities.
4. Interpretation of almonds as seeds or dry fruits.
5. Imposition of redemption fine and penalty.

Detailed Analysis:

1. Classification of Almonds under Customs Laws:
The primary issue in this case is whether almonds are classified as seeds or dry fruits under the Customs Laws. The Petitioners imported two consignments of almonds and described them as 'Seed of Almonds-Non Pareil Quality' in the Bills of Entry for Home Consumption. The Customs Authorities issued Show Cause Notices and later confiscated the consignments, classifying them as dry fruits under Chapter 8, clause 0802.11 of the Customs Tariff Act, 1975, rather than seeds under Chapter 12.

2. Validity of REP (Replenishment) Licence for Importing Almonds:
The Petitioners contended that almonds were seeds and thus covered under Clause G.2 (i)(a)(d) of Appendix 17 of the Import & Export Policy (April 1985 - March 1988), which permits the import of seeds under a REP licence. However, the Customs Authorities concluded that the consignments were not covered by valid licences and confiscated the goods, offering an option to clear them on payment of a redemption fine of Rs. 6,00,000/- and imposing a penalty of Rs. 50,000/-.

3. Jurisdiction of Customs Authorities versus Licensing Authorities:
The Petitioners argued that the Customs Authorities had impinged upon the jurisdiction of the Licensing Authority by questioning the description of the goods. They relied on several rulings, including Union of India v. Tarachand Gupta & Bros., which emphasized that Customs Authorities should not interpret licensing policy. However, the court held that the Customs Authorities had merely carried out their duty as prescribed by the Customs Act by concluding that the consignments were not covered by the REP licences.

4. Interpretation of Almonds as Seeds or Dry Fruits:
The Petitioners produced various certificates and references from authorities like the California Almond Growers Exchange, U.S. Department of Agriculture, and Encyclopaedia Britannica to support their claim that almonds were seeds. Despite this, the court found that almonds are classified under Chapter 8 (Edible fruit and nuts) and not under Chapter 12 (Oil seeds and oleaginous fruits) of the Customs Tariff Act, 1975. The court emphasized that the classification should be based on the relevant Acts and not on external references.

5. Imposition of Redemption Fine and Penalty:
The Petitioners requested the court to set aside the redemption fine and penalty. However, the court held that once it was found that the goods were attempted to be cleared under an invalid licence, it could not interfere with the order passed by the Additional Collector of Customs. The court dismissed the Writ Petition with costs and stayed the operative part of the order till 23-4-1990.

Conclusion:
The court concluded that almonds are classified as dry fruits under Chapter 8 of the Customs Tariff Act, 1975, and not as seeds under Chapter 12. The REP licences produced by the Petitioners did not cover the import of almonds. The Customs Authorities acted within their jurisdiction, and the redemption fine and penalty imposed were justified. The Writ Petition was dismissed with costs.