2023 (3) TMI 26 - AT - Customs

Seeking provisional release of seized goods - coal imported by the Respondent (RPC) having sulphur content within the prescribed limit or not - prohibited goods or not. The sole contention of the Revenue against the provisional release of the impugned goods is that the said goods having sulphur content more than 4% and the same cannot be used by aluminium manufacturing industry, but Revenue has not disputed the fact that the Respondents are calciner and used the impugned goods as feedstock for making CPC from RPC for their customers with sulphur content ranging from 0.8% to 3.5%. HELD THAT - There is no harm to release the goods provisionally and merits of the case are to be dealt at the time of final adjudication of the matter. We further take note of the fact that the Ld.Commissioner(Appeals) in his order has considered the request of the Respondent for re-testing of the goods by any recognized and notified laboratory as the Customs Lab is not a recognized laboratory under Environment Protection Act - the Adjudicating authority is directed to allow the request of the Respondents for re-testing of the goods in question from a recognized notified Environment Laboratory. There are no infirmity in the impugned orders, therefore, the said orders are confirmed - the Adjudicating authority are directed to release the goods provisionally to the Respondents immediately - appeal of Revenue dismissed.

Issues Involved:
1. Jurisdiction and legality of the seizure of imported Raw Petroleum Coke (RPC).
2. Compliance with sulphur content standards as per Indian Standard (IS) 17049.
3. Validity of testing procedures and laboratories used for sulphur content analysis.
4. Provisional release of seized goods under Section 110A of the Customs Act, 1962.
5. Merit of the Appeals filed by the Revenue against the release orders.

Detailed Analysis:

1. Jurisdiction and Legality of the Seizure:
The Respondents challenged the jurisdiction and legality of the seizure of RPC by filing writ petitions in the Hon'ble High Court at Calcutta. The Division Bench directed the disposal of the application under Section 110A of the Customs Act as per the Trial Judge's order. The Respondents argued that the seizure was wrongful as the goods were lawfully released by the assessing officer at Kolkata Port.

2. Compliance with Sulphur Content Standards:
The Respondents, being calciners, used the imported RPC for making Calcined Petroleum Coke (CPC) with sulphur content ranging from 0.8% to 3.5%, which complies with the BIS standard for anode making in the aluminum industry (sulphur content less than 3.5%). The Revenue's contention was that the imported RPC had sulphur content beyond the prescribed limit, making it prohibited goods. However, the Ld. Commissioner(Appeals) found that the Respondents complied with the BIS standard, and there was no dispute on this aspect.

3. Validity of Testing Procedures and Laboratories:
The Respondents objected to the testing of samples by the Central Revenue Control Laboratory (CRCL), Kolkata, as it is not a notified laboratory under the Environment Protection Act. The Ld. Commissioner(Appeals) noted that the Customs lab is not recognized under the Environment Protection Act and that the request for retesting by a recognized notified Environment laboratory should not be denied. The Tribunal directed the Adjudicating authority to allow the request for retesting of the goods by a recognized notified Environment Laboratory.

4. Provisional Release of Seized Goods:
The Respondents sought provisional release of the seized goods under Section 110A of the Customs Act, 1962. The Adjudicating authority initially rejected the application for provisional release, but the Ld. Commissioner(Appeals) set aside the order and directed the provisional release of the detained/seized goods. The Tribunal found no harm in releasing the goods provisionally, noting that the merits of the case would be dealt with at the time of final adjudication.

5. Merit of the Appeals Filed by the Revenue:
The Revenue filed Appeals against the orders of the Ld. Commissioner(Appeals) and also filed Stay Applications. The Tribunal found that the sole contention of the Revenue was that the goods had sulphur content more than 4%, which could not be used by the aluminum manufacturing industry. However, the Revenue did not dispute that the Respondents used the RPC as feedstock for making CPC with sulphur content ranging from 0.8% to 3.5%. The Tribunal confirmed the orders of the Ld. Commissioner(Appeals) and directed the provisional release of the goods. The Stay Applications filed by the Revenue were dismissed, and the Appeals were also dismissed.

Conclusion:
The Tribunal upheld the orders of the Ld. Commissioner(Appeals) for the provisional release of the seized goods and directed retesting by a recognized notified Environment Laboratory. The Appeals and Stay Applications filed by the Revenue were dismissed, confirming that the Respondents complied with the relevant BIS standards and that the provisional release of the goods was justified.

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