2024 (12) TMI 479 - HC - Customs

Classification of imported goods - Betelnuts/ Arecanuts known as 'Supari' - to be classified under CTH 21069030 or not The AAR, New Delhi has passed Advance Ruling holding the classification of the above goods under CTH 21069030 - main contention of the learned counsel for the appellant is that the goods imported by the Importer will be covered under Chapter 8 and not under Chapter 21 of CTH (Customs Tariff Heading) - HELD THAT - The findings of the Advance Ruling Authority in its Ruling dated 31.03.2017, deserves to be upheld. Consequentially, the claim of the Respondent/ Importer is upheld and the claim of the Appellant/ Department stands rejected, in light of the provisions of Section 28J of the Customs Act, 1962. Further, as the goods have been detained by the Department, since from the date of their import and that too for a prolonged period and also considering the fact that the goods are perishable in nature, this Court deems it fit to direct the appellant/Department to release the goods forthwith and in any case, within a period of one week from the date of receipt of a copy of this judgment. It is also made clear that the Importer shall also be eligible for a Detention Certificate for waiver of Demurrage and Container Detention Charges in terms of Regulation 6(1)(l) of the Handling of Cargo in Customs Area Regulations, 2009 and the Department shall ensure that the Detention Certificate waiving Demurrage and Container Detention Charges are honored by the respective CFS/ Liner, failing which the Department will be liable for the same. Appeal allowed.

Issues Involved:

1. Classification of imported goods under the Customs Tariff Heading (CTH).
2. Validity and binding nature of the Advance Ruling dated 31.03.2017.
3. Provisional release and importability of goods below the Minimum Import Price (MIP).
4. Eligibility for waiver of demurrage and container detention charges.

Issue-wise Detailed Analysis:

1. Classification of Imported Goods:

The primary dispute revolved around whether the imported goods, specifically betel nut products known as 'Supari', should be classified under Chapter 8 or Chapter 21 of the Customs Tariff Heading (CTH). The Importer argued for classification under Chapter 21, based on an Advance Ruling obtained in 2017, which classified the goods under CTH 21069030. The Department contended that the goods should be classified under Chapter 8, arguing that the goods were imported below the Minimum Import Price and were therefore prohibited.

2. Validity and Binding Nature of the Advance Ruling:

The Court upheld the Advance Ruling dated 31.03.2017, which classified the goods under Chapter 21. The ruling was deemed valid and binding on the Department, as per Section 28J of the Customs Act, 1962. The Court noted that the Advance Ruling remains valid for three years from the date of the Finance Act, 2022, unless there is a change in law or facts. The Department's attempts to challenge the ruling through writ petitions were dismissed, reinforcing the binding nature of the Advance Ruling.

3. Provisional Release and Importability of Goods Below MIP:

The Court addressed the issue of provisional release of goods imported below the Minimum Import Price (MIP). The Department argued that the goods were imported below MIP, violating import policy and potentially harmful to domestic growers and consumers. However, the Court emphasized that the focus should be on the duty rather than the importability of the goods. The Court directed the provisional release of goods, subject to payment of customs duty and furnishing security for any redemption fine, as the goods were not subject to absolute confiscation.

4. Eligibility for Waiver of Demurrage and Container Detention Charges:

The Court recognized the perishable nature of the goods and the prolonged detention by the Department. It directed the Department to issue a Detention Certificate for waiver of demurrage and container detention charges, in accordance with Regulation 6(1)(l) of the Handling of Cargo in Customs Area Regulations, 2009. The Court emphasized that the waiver should be honored by the respective CFS/Liner, failing which the Department would be liable for the charges.

Conclusion:

The Court allowed the writ appeals filed by the Importer, thereby upholding the Advance Ruling and directing the release of goods within a week. The appeals filed by the Department were dismissed. The Court's decision emphasized adherence to the Advance Ruling and the importance of procedural compliance in customs matters.

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