2012 (3) TMI 204 - HC - Customs

Not following the orders of the higher Appellate authorities -Imported items of the asseess had been taken up for investigation by the Revenue - goods had been detained - Revenue stated that there is a mis-declaration of the cargo - petitioner had been given an option to redeem the goods, on payment of a fine u/s 125 of the Customs Act, 1962, and a sum of Rs.5 lakhs had been imposed on the petitioner and a sum of Rs.1 lakh had been imposed on the deponent within a period of 30 days from the date of receipt of the order - petitioner, as well as the deponent filed separate appeals, before the Office of the Commissioner of Customs (Appeals) - petitioner furnished a copy of the said order, to the second respondent to release of the imported consignments and to issue the Detention Certificate, for the waiver of rent and demurrage charges,no action had been taken by the respondents petitioner prefer the present writ petition before this Court - Held that - Department concerned should give effect to the orders of the higher appellate authorities, which are binding on them, by paying utmost regard to judicial discipline, mere fact of the filing of an appeal against such orders and the pendency of such an appeal cannot be shown as a sufficient reason for not following the orders of the higher appellate authorities - respondents are directed to release the goods in question within Ten days from the date of receipt of a copy of this order - open to the petitioner to make a representation to the appropriate authority, with regard to the issuance of a Detention Certificate, for the waiver of the demurrage and detention charges .

Summary

Issues:
1. Mis-declaration of imported goods as bio-fertilizers.
2. Allegation of importing unregistered insecticides.
3. Confiscation of goods and imposition of penalties.
4. Discrepancy in classification of imported goods.
5. Delay in releasing detained goods.

Issue 1: Mis-declaration of imported goods as bio-fertilizers
The petitioner, a partnership firm engaged in producing beneficial microorganisms for agriculture, imported plant leaf extract from China. The investigating agency alleged mis-declaration, stating that the goods were insecticides requiring registration from the Central Insecticide Board. Testing by various agencies revealed the presence of matrine, an insecticide, in the samples. The investigating agency issued a show cause notice proposing re-classification of the goods, leading to detention and seizure of the imported items.

Issue 2: Allegation of importing unregistered insecticides
The Department of Agriculture & Cooperation and the National Centre for Mass Spectrometry found traces of matrine, an insecticide, in the imported samples. The agency claimed that the petitioner attempted to import unregistered insecticides under the guise of bio-fertilizers. An appeal was filed before the Customs, Excise and Service Tax Appellate Tribunal against the order of the appellate authority.

Issue 3: Confiscation of goods and imposition of penalties
The third respondent confirmed the allegations, classifying the goods as matrine compound insecticides and proposing confiscation under various customs and trade acts. Penalties were imposed, and the petitioner was given the option to redeem the goods by paying a fine. The petitioner challenged these orders through separate appeals before the Commissioner of Customs (Appeals).

Issue 4: Discrepancy in classification of imported goods
The appellate authority concluded that the imported goods were plant leaf extracts, as declared by the petitioner, and should be classified under a specific customs tariff heading. The authority rejected the claim that the goods were insecticides, contrary to the investigating agency's assertion. Despite the appellate authority's order, the goods were not released, prompting the petitioner to file a writ petition before the High Court.

Issue 5: Delay in releasing detained goods
The High Court held that the Department should have followed the appellate authority's order to maintain judicial discipline. The court criticized the delay in releasing the goods, noting that the prolonged detention was arbitrary and illegal. The court directed the authorities to release the goods promptly and ordered consideration for waiving demurrage and detention charges. The petitioner was allowed to make representations for such waivers, and the writ petition was granted in favor of the petitioner.

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