2023 (11) TMI 182 - HC - Customs

Seeking grant of release of detained goods - import of Lithium Ion Cell - it is alleged that the consignment in question was not in compliance with the requirement of BIS marking - HELD THAT - The requirement of labelling and marking under paragraph 6 under Schedule II of the Regulation is clear to the effect that each product or the package , as the case may be , shall be marked with the Standard Mark, as specified in Annexure-II i.e. the sample illustrative mark. Thus, under the said regulations, it is clearly permissible to have a mark on the package, which requirement is met by the petitioner, in respect of the consignment in question of the two bills of entries. The respondents despite the clear provisions of paragraph 6 of the Schedule II Scheme I of the 2018 Regulation have chosen not to apply the requirement as it stands, however, they are applying Public Notice No. 136 of 2018 dated 8 October 2018 issued by the Office of the Commissioner of Customs, NS-III, Mumbai Customs Zone-II. On a plain reading of Public Notice No. 136 of 2018 dated 8 October 2018, it appears that the Commissioner of Customs providing for such requirement under paragraph 6 has actually deviated from the requirements of the 2018 Regulations, and more particularly paragraph 6 of the labelling and marking requirements as contained in Schedule II of the Scheme I, under the said Regulations, as noted by us hereinabove. In taking the position as assailed, the respondents also could not have taken recourse to the applicability of RCR orders (Requirement For Compulsory Registration) inasmuch as the RCR order was wholly irrelevant, in so far as the present goods are concerned. This inasmuch as the RCR order was applicable only to the electronic and information and technology goods , subject matter of Electronics and Information Technology Goods (Requirement For Compulsory Registration) Order 2012, which provides that the standard mark shall be placed on the product and packaging both. There is no justification whatsoever on the part of the respondents, in not permitting to the petitioner, release of the consignments in question - there is no justification whatsoever as to how a different yardstick could be applied by the respondents to the goods in question, when similar goods under seven bills of entries were released and only two bills of entries were subjected to an illegal detention by the respondents. The goods are illegally detained and without any powers being exercised by the customs authorities under section 110 of the Act and that too for such a long period - Petition allowed in part.

Summary

Issues Involved:
1. Detention of goods under two bills of entries.
2. Compliance with Bureau of Indian Standards (BIS) labelling requirements.
3. Violation of principles of natural justice.
4. Issuance of show cause notice and its implications.
5. Provisional release of detained goods.

Summary:

1. Detention of Goods under Two Bills of Entries:
The petitioner, a subsidiary of Bajaj Auto Ltd., imported "Lithium Ion Cell" under various bills of entries. While consignments under seven bills of entries were cleared for home consumption, the goods under two bills of entries dated 8 February 2023 were detained by the Customs Authorities.

2. Compliance with BIS Labelling Requirements:
The petitioner argued that the detained consignments complied with the BIS labelling requirements as per the Bureau of Indian Standards (Conformity Assessment) Regulations, 2018 (2018 Regulations). The packages of these goods contained the standard mark, registration number, and model number. The Customs Authorities, however, detained the goods citing non-compliance with the BIS marking requirements, asserting that the BIS mark should be affixed on the product itself and not just on the packaging.

3. Violation of Principles of Natural Justice:
The petitioner had previously been issued a show cause notice alleging non-compliance with BIS marking requirements, leading to an order-in-original dated 23 May 2023, which confiscated the goods without a hearing. The petitioner challenged this order in Writ Petition Nos. 8768 and 8769 of 2023. The Court quashed the order-in-original on 17 July 2023, citing a breach of natural justice principles, as no show cause notice was issued before confiscation.

4. Issuance of Show Cause Notice and Its Implications:
Despite the Court's order, the Customs Authorities issued a new show cause notice on 1 September 2023, asserting non-compliance with BIS labelling requirements. The petitioner amended their petition to challenge this show cause notice, reiterating that their imports complied with the 2018 Regulations and that the Public Notice No. 136 of 2018 was misapplied.

5. Provisional Release of Detained Goods:
The Court analyzed the BIS labelling requirements under the 2018 Regulations, which allow the standard mark to be affixed on either the product or the package. The Court found that the Customs Authorities had misapplied Public Notice No. 136 of 2018 and that the petitioner's goods complied with the BIS standards. The Court concluded that the detention of goods was unjustified and ordered their release.

Order:
The petition was allowed in terms of the petitioner's prayer clauses (a) and (b), directing the Customs Authorities to permit clearance of the detained goods and issue a Detention and Demurrage Waiver Certificate. The show cause notice dated 1 September 2023 was to be adjudicated independently within two months. The rule was made absolute, and no costs were imposed.