2022 (4) TMI 1261 - HC - Customs

Release of vessel - Classification of imported goods - GTL Light Paraffin - The goods have already been released of a bond executed by the importer. - whether the subject goods is in the form of Liquid Paraffin or Light Diesel Oil? - report of the CRCL, rejected by DRI - HELD THAT - The writ applicants are the owners of the vessel. It is noted that the goods have already been released. As two reports now on record of two different laboratories, further detention of the vessel, need not be allowed. At least, the vessel needs to be released on the writ applicant furnishing an appropriate undertaking to the Commissioner (Customs) to the effect that the writ applicants shall cooperate in the inquiry till the last. The inquiry has otherwise also to proceed further as the importer has also executed a bond while getting the good released and has already furnished a bank guarantee of the amount equivalent to the value of the goods. This writ application is disposed off directing the Commissioner (Customs), Kandla, to release the vessel after obtaining the undertaking.

Summary

Issues:
1. Determination of the nature of subject goods - "Liquid Paraffin" or "Light Diesel Oil"
2. Detention of vessel and release of goods
3. Dispute between Directorate of Revenue Intelligence (DRI) and Central Revenue Control Laboratory (CRCL) reports

Analysis:
1. The primary issue in this case is the nature of the subject goods, whether it is "Liquid Paraffin" as claimed by the writ applicants or "Light Diesel Oil" as asserted by the Directorate of Revenue Intelligence (DRI). The controversy arose when samples were sent to the Central Revenue Control Laboratory for analysis. The CRCL report concluded that the samples were "Liquid Paraffin" and met the requirements of Paraffinic Diesel Fuel, distinct from Automotive Diesel Fuel or Light Diesel Oil.

2. The vessel owned by the writ applicants was detained in connection with this dispute. However, the goods had already been released upon the importer furnishing a bank guarantee equivalent to the goods' value. The High Court, considering the conflicting reports from CRCL and DRI, decided to release the vessel. The court directed the writ applicants to provide an undertaking to cooperate in the inquiry, as the investigation needed to proceed further due to the bond executed by the importer.

3. Despite the CRCL report favoring the goods being "Liquid Paraffin," the DRI expressed reservations and intended to pursue further inquiry. The DRI highlighted that the CRCL report did not cover all parameters of the Indian Standard, prompting them to seek additional investigation. The High Court acknowledged the DRI's concerns and allowed them to continue their inquiry independently while ordering the release of the vessel under the condition of the writ applicants' cooperation.

In conclusion, the High Court's judgment resolved the immediate issue of releasing the vessel while allowing the DRI to conduct further investigations regarding the nature of the subject goods. The conflicting reports from CRCL and DRI necessitated a balanced approach to ensure compliance with the law and the continuation of the inquiry process.