2023 (11) TMI 531 - HC - Customs

Seeking provisional release of the goods - Ethanol Alcohol - classification of goods - to be classified under CTH 22.07 or under CTH 98.02 - HELD THAT - The Petitioner would be justified in seeking provisional release of the goods. Admittedly, there is no dispute that the Petitioner has been importing these goods for last many decades and the classification under 98.02 has been accepted by the Respondents. Except the bill of entries which are the subject matter of show cause notice dated 28th July 2022 all the imports are cleared under CTH 98.02. The Petitioner has replied to the said show cause notice, but till today the Respondents have not adjudicated and pass any order. The Petitioner is a regular importer of the said goods and not a fly by night operator. The goods are in the bottles of 500 ml and confirm to the marking requirement as per the chapter 98 of the Customs Tariff Act. The Respondents would not be justified in not permitting provisional release of goods by contending that the goods under consideration are used in vaccine and sanitizer etc. The classification has to be seen at the time of import by the Petitioner and not the use to which it is put by the buyers of the goods from the Petitioner. There is no condition in the Customs Tariff under chapter 98 which imposes such an obligations on the Petitioner - the Respondents are not justified in refusing to release the goods provisionally. The Petitioner is entitled for provisional release goods under bill of entry no. 7594166 dated 30th August 2023 on execution of the bond - Petition disposed off.

Summary

Issues involved:
The classification of imported Ethanol Alcohol under Customs Tariff Heading (CTH) 98.02, the provisional release of goods under Bill of Entry No. 7594166, and the dispute regarding the correct classification of the goods.

Classification Issue:
The Petitioner, engaged in importing Laboratory Chemicals, imported Ethanol Alcohol under CTH 98.02, paying customs duty at 10%. Respondents issued summons questioning the classification under CTH 22.07, but previous imports were cleared under CTH 98.02. Despite a pending show cause notice on classification, the Petitioner imported goods under Bill of Entry No. 7594166, seeking clearance based on correct classification under CTH 98.02. Respondents put the goods on hold for testing, alleging the goods are not solely for laboratory use, but for sanitizer and vaccination. The Petitioner argued for provisional release, emphasizing correct marking and historical acceptance of classification under 98.02.

Provisional Release Issue:
The Petitioner sought provisional release of goods under Section 110 of the Customs Act, 1962, as the goods were held up for examination post-clearance permission. Respondents contended for classification under CTH 22.07 with a higher duty rate of 150%, citing the use of goods for purposes other than laboratory use. The Court found in favor of the Petitioner, noting the historical acceptance of classification under CTH 98.02, lack of justification for the delay in serving the seizure memo, and the absence of prohibitions on the goods. The Court ordered the provisional release of goods under Bill of Entry No. 7594166 upon execution of a bond, directing the Respondents to release the goods within two weeks while keeping all classification contentions open for future proceedings.