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2015 (12) TMI 244 - HC - CustomsValidity of circular No.450/176/2014-Cus-IV dated 7/11/2014 - restriction on the petitioner from importing Alloy Steel Deformed Bars falling under Chapter Heading 7228 of the CTA - Held that - By the Circular dated 07/11/2014, issued by Govt. of India, Ministry of Finance, New Delhi the relevant factor to be considered in determining the applicability of BIS standard would be the description of the product in the Indian Standard and not the one indicated by the ITC (HS) Code. To put it simply; the import of the said Alloy Steel should be covered by the description of the product in the Indian Standard would require BIS certification and Counsel for the respondent submitted that the impugned certificate has received confirmation from both Ministry of Steel and Bureau of Indian Standards and hence it is applicable to the petitioner. I however find that such is not the present case. Explanation to the amended schedule indicates that any case falling under the ITC (HS) Codes notified under the Order shall not be restricted if they are not corresponding BIS Standard in Column and the explanation can not be read to mean Steel Quality Control order shall be applicable to goods for which no ITC (HS) Code have been notified at all. Similarly, the issuance of the Steel Quality Control order Alloy Steel Products not covered by the headings and sub-heading of the ITC (HS) mentioned in the order have been allowed clearance at various ports all over India. And in this light it would be necessary to consider that the question is yet to be decided by the appropriate Appellate Authority whether the Alloy Grade Bars and high strength Deformed Steel Bars are not covered by the mandatory certification.- Similarly, on considering the question of applicability of the impugned Circular dated 07.11.2014 bearing No.450/176/2014-Cus-IV and the fact that agreement is dated 24.06.2014 regarding the petitioner s goods have been received at the port in consequence of commercial invoice dated 04th September 2014, I find that the Circular cannot be applied retrospectively to the consignment of the petitioner and hence in this light also the petition needs to be partly allowed. - Decided partly in favour of assessee.
Issues:
Challenge to Circular restricting import of Alloy Steel Deformed Bars under Chapter Heading 7228 based on various grounds including constitutionality, jurisdiction, and applicability of BIS standards. Constitutionality and Legality of Circular: The petitioner challenged Circular No.450/176/2014-Cus-IV dated 07/11/2014 on multiple grounds. Firstly, the petitioner argued that the goods arrived before the Steel Products Quality Control Order's Second Amendment, making the Circular inapplicable. The petitioner contended that the goods were not covered under the amended schedule of the Steel Quality Control Order. Additionally, the petitioner claimed the Circular was arbitrary, unreasonable, and violated Article 14 of the Constitution by favoring certain manufacturers and discriminating against others. The petitioner also alleged malafide intentions behind the Circular, asserting bias and nepotism. Jurisdiction of the Court: The petitioner argued that the High Court had jurisdiction to decide the petition as the petitioner's registered office was in Indore, where the business was conducted and goods intended for sale. The petitioner emphasized that Circulars issued by the Central Government could be challenged anywhere in the country. The respondent contested the jurisdiction, citing precedents and claiming the petition was not maintainable in the Indore High Court. Analysis of Bombay High Court Judgment: The Bombay High Court held that the Circular was not ultra vires Article 14 of the Constitution and did not prohibit importation of goods. The Court found the Circular did not hold up consignments unnecessarily, was not discriminatory, malafide, or in violation of constitutional mandates. The petitioner's reliance on the Bombay High Court judgment was crucial in determining the legality of the Circular. Applicability of BIS Standards: The Court analyzed the applicability of BIS standards to the Alloy Steel Deformed Bars. It was observed that the description of the product in the Indian Standard, not the ITC (HS) Code, determined BIS certification requirements. While the respondent argued for the applicability of BIS standards, the Court found that the impugned certificate did not apply to the petitioner's case. The Court highlighted that the Steel Quality Control Order did not restrict goods not covered by the ITC (HS) Codes mentioned in the order. Decision and Directions: Ultimately, the Court partly allowed the petition, directing the respondent to clear the goods covered by the commercial invoice dated 4th September 2014, including the Alloy Steel Deformed Bars at the port of Chennai. The Court clarified that it was not making any observation on the application of BIS standards. The respondent was instructed to cooperate with any further investigations regarding the goods' compliance with standards. This detailed analysis covers the various legal issues raised in the judgment, including challenges to the Circular, jurisdiction of the Court, interpretation of BIS standards, and the final decision and directions provided by the Court.
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