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2018 (8) TMI 1349 - HC - CustomsClassification of imported goods - Ethylene Di-chloride (EDC) - insecticide imported for a non-insecticidal purpose - whether EDC would fall under heading 3808? Held that - It is evident from the description of the items included under headings 3808 that only insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plantgrowth regulators, disinfectants and similar products, put up in forms or packings for retail sale or as preparations or articles alone would fall under heading 3808. EDC imported by the petitioner being not a product put up in forms or packings for retail sale or as preparations or articles and since EDC is specifically included as an item in Chapter 29 of Schedule-1 of ITC, it cannot be contended that the same would fall under heading 3808 of Chapter 38 of Schedule-1 of ITC. The contention raised by the learned Standing Counsel for the first respondent, relying on the Insecticides (Fourth Amendment) Rules, 2017 is also without substance as it is well settled that conferment of Rule making power by an Act does not enable the Rule making authority to make a Rule that travels beyond the scope of the enabling Act. Petition allowed.
Issues Involved:
1. Applicability of the Insecticides Act, 1968 to the import of Ethylene Di-chloride (EDC) for non-insecticidal purposes. 2. Validity of Ext.P10 decision by the Registration Committee. 3. Compliance with the Foreign Trade (Development and Regulation) Act, 1992 regarding the import of EDC. 4. Applicability of the Insecticides (Fourth Amendment) Rules, 2017 to the import of EDC through Cochin Port. Issue-wise Detailed Analysis: 1. Applicability of the Insecticides Act, 1968 to the import of Ethylene Di-chloride (EDC) for non-insecticidal purposes: The petitioner, a company manufacturing Poly Vinyl Chloride, imports EDC as a raw material. EDC is listed as an insecticide in the Schedule to the Insecticides Act, 1968. Section 38 of the Act exempts substances intended for non-insecticidal purposes from the Act's provisions. The petitioner has been importing EDC without registration or import permits based on this exemption. The Central Board of Excise and Customs clarified in Ext.P9 circular that insecticides imported for non-insecticidal purposes do not require registration or import permits. The court, referencing the Supreme Court decisions in Steel Authority of India v. Collector of Customs, Bombay and Paper Products Ltd. v. Commissioner of Central Excise, held that the customs authorities must adhere to the trade notices and circulars, which are binding and uniform across all states. Thus, the court found that the first respondent's insistence on an import permit for EDC was not tenable. 2. Validity of Ext.P10 decision by the Registration Committee: Ext.P10 decision of the Registration Committee prescribed a new proforma for issuing import permits for insecticides intended for non-insecticidal purposes. The court noted that actions of statutory authorities must align with the statute's provisions, and since Section 38 of the Act exempts insecticides intended for non-insecticidal purposes, Ext.P10 was deemed ultra vires the Act. Therefore, the decision of the Registration Committee cannot mandate import permits for EDC imported for non-insecticidal purposes. 3. Compliance with the Foreign Trade (Development and Regulation) Act, 1992 regarding the import of EDC: The Assistant Solicitor General of India argued that a notification issued on 01.01.2015 under the Foreign Trade Act required import permits for insecticides imported for non-insecticidal purposes. However, the petitioner contended that this notification did not apply to EDC, which falls under Chapter 29 of Schedule-1 of the ITC, not Chapter 38. The court agreed with the petitioner, noting that the notification applied to goods under Chapter 38 and not to EDC listed under Chapter 29. Therefore, there were no applicable restrictions under the Foreign Trade Act for importing EDC. 4. Applicability of the Insecticides (Fourth Amendment) Rules, 2017 to the import of EDC through Cochin Port: The first respondent argued that Rule 45 of the Insecticides Rules, 1971, as amended by the Insecticides (Fourth Amendment) Rules, 2017, excluded Cochin Port from ports where insecticides could be imported. The court dismissed this argument, stating that rule-making authority cannot exceed the scope of the enabling Act. Since Section 38 of the Act exempts EDC imported for non-insecticidal purposes, the amended rules cannot impose additional restrictions. Consequently, the court directed the first respondent to allow the petitioner to clear consignments of EDC without insisting on registration and import permits from the Central Insecticides Board and Registration Committee. Conclusion: The court quashed Ext.P11 notice and directed the first respondent to permit the petitioner to clear EDC consignments without the need for registration and import permits under the Insecticides Act, 1968. The judgment emphasized adherence to statutory provisions and binding circulars, ensuring uniformity in customs procedures across states.
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