2020 (6) TMI 147 - HC - Customs

Classification of imported goods - yeast extract, Egyptian Basil, Soy Sauce Powder etc. - Whether the customs authorities are empowered to differ the classification as sought by the petitioner for the purpose of charging of the higher duty? HELD THAT - On a plain and simple reading of the prayer as well as the prayer for stay of the presence/summoning of the Managing Director by the officers of the DRI cannot be conjoined in one writ petition. Even otherwise, the provisions of Section 108 only deals with recording of the statements, nothing beyond. Any apprehension can be invoked when the entire action initiated in law except that DRI officers of New Delhi do not have the territorial jurisdiction. Section 110(A) leaves no manner of doubt that the petitioner is not prepared to move an application for provisional release of the goods being perishable in nature. However the writ petition do not disclose any such request so far. Mr.Warrier and Mr. Manu at this stage submits that, the customs authorities would not have any objection in considering the prayer of the petitioner in case such application is made in accordance with law - the alleged cause of action based only on the apprehension not supported by any documents to make out the case warranting interference under Article 226 of the Constitution of India. Petition dismissed.

Issues:
1. Classification of imported goods for customs duty.
2. Authority of customs officials to differ in classification for charging higher duty.
3. Jurisdiction of Directorate of Revenue Intelligence (DRI) in customs matters.
4. Maintainability of writ petition regarding summons and release of goods.
5. Provisional release of perishable goods under Section 110(A) of the Customs Act.

Issue 1: Classification of imported goods for customs duty
The petitioner, a company dealing in culinary products, imported various materials, including yeast extract, and classified it as IS2102. The dispute arose when customs authorities differed in classification, potentially leading to higher duty charges.

Issue 2: Authority of customs officials to differ in classification
The key question was whether customs authorities had the power to vary the classification of goods, particularly yeast extract, for imposing a higher duty rate. The petitioner sought clarity on the authority of customs officials in such matters.

Issue 3: Jurisdiction of Directorate of Revenue Intelligence (DRI)
The involvement of the DRI in summoning the petitioner's Managing Director raised concerns about jurisdiction. The petitioner argued that the DRI's actions caused delays in releasing goods, impacting operations and financial obligations.

Issue 4: Maintainability of writ petition regarding summons and release of goods
The petitioner filed a writ petition seeking mandamus to expedite clearance of imported goods and utilize IGST credit. The respondents challenged the maintainability of the petition, questioning the amalgamation of various causes of action and the jurisdiction of DRI officials.

Issue 5: Provisional release of perishable goods under Section 110(A)
The court addressed the absence of a formal application for provisional release of perishable goods under Section 110(A) of the Customs Act. The respondents indicated a willingness to consider such a request if made in accordance with the law.

The judgment highlighted the petitioner's efforts to comply with customs regulations, including submitting necessary documents for imported goods. However, delays in releasing goods due to differing classification by customs officials led to financial losses and operational disruptions. The petitioner's plea for mandamus to expedite clearance and utilize IGST credit was contested by the respondents, citing jurisdictional concerns and procedural discrepancies.

The court dismissed the writ petition, emphasizing the need for separate proceedings to address the actions of the DRI and the classification dispute. It underscored the importance of following legal procedures, including formal applications for provisional release of perishable goods under Section 110(A) of the Customs Act. The judgment clarified the limitations of Section 108 regarding the recording of statements by DRI officials and the distinct nature of the issues raised by the petitioner.

In conclusion, the court's decision to dismiss the writ petition and set aside the interim order highlighted the importance of adhering to legal processes and maintaining clarity in addressing customs-related disputes and jurisdictional matters. The judgment emphasized the need for separate actions to address specific issues raised by the petitioner, including classification disputes and the involvement of DRI officials in customs matters.

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