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2024 (3) TMI 297 - HC - CustomsClassification of goods - Ethyl Alcohol Absolute having purity - to be classified under CTH 22.07 or under CTH 98.02 - Demand duty - Seeking provisional release of goods - interest - penalty - HELD THAT - Admittedly, there is no dispute that the Petitioner has been importing Ethyl Alcohol Absolute for the last many years and the classification under CTH 98.02 has been accepted by the Respondents, except in respect of Bill of Entry No. 7568895, which is the subject matter of the present Petition. The Petitioner is a regular importer of Ethyl Alcohol Absolute and not a fly by night operator. The Ethyl Alcohol Absolute is in bottles of 500 ml and confirms to the marking requirement as per Chapter 98 of the Customs Tariff Act. In our view, the Respondents would not be justified in not permitting provisional release of Ethyl Alcohol Absolute on the basis that some investigation is being conducted. The classification has to be seen at the time of import by the Petitioner and not the use to which it is put by the buyers of the goods from the Petitioner. There is no condition in the Customs Tariff under chapter 98, which imposes such an obligation on the Petitioner. Thus, the Respondents are not justified in refusing to release the Ethyl Alcohol Absolute provisionally. As correctly submitted by the Petitioner, in similar circumstances, this Court, by its Judgement in M/s. K. Raj and Co. Vs. the Union of India 2023 (11) TMI 531 - BOMBAY HIGH COURT and M/s. K. Raj and Co. Vs. the Union of India 2024 (2) TMI 34 - BOMBAY HIGH COURT has ordered provisional release of the seized goods on execution of a bond. We see no reason as to why similar orders ought not to be passed in the present matter. Thus, Petitioner is entitled for provisional release of the Ethyl Alcohol Absolute under Bill of Entry No. 7568895 on execution of a bond by the Petitioner to secure the differential duty and consequential amount, if any. The Writ Petition is disposed of.
Issues Involved:
1. Legality and validity of the seizure memo. 2. Classification of Ethyl Alcohol Absolute under the Customs Tariff. 3. Entitlement for provisional release of the seized goods. Summary: Legality and Validity of the Seizure Memo: The Petitioner, a sole proprietor of M/s. Hemant Trading Company, filed a Petition under Article 226 of the Constitution of India, challenging the seizure memo dated 28th September 2023 issued by Respondent No. 4. The Petitioner argued that the Ethyl Alcohol Absolute imported under Bill of Entry No. 7568895 dated 28th August 2023 was misclassified despite being ordered out of charge by the proper customs officer. Classification of Ethyl Alcohol Absolute: The Petitioner has been importing Ethyl Alcohol Absolute for over twenty years, classified under Customs Tariff Heading (CTH) 98.02 as "Laboratory Chemical." The goods were packed in 500 ml bottles and marked for laboratory use, satisfying Note 3 of Chapter 98. The Petitioner contended that the classification under CTH 98.02 was appropriate and had been accepted by the Respondents for years. However, Respondent No. 4 seized the goods, believing they were classifiable under CTH 22.07, which the Petitioner argued was erroneous and without basis. Entitlement for Provisional Release: The Court noted that the Petitioner had been importing Ethyl Alcohol Absolute regularly and the classification under CTH 98.02 had been accepted by the Respondents except for the current Bill of Entry. The Court found the Respondents' refusal to provisionally release the goods unjustified, especially since the classification dispute had been ongoing for years without issue. The Court referenced similar cases where provisional release was granted upon execution of a bond. Orders: a) The Petitioner is entitled to provisional release of the Ethyl Alcohol Absolute under Bill of Entry No. 7568895 dated 28th August 2023 on execution of a bond to secure the differential duty and consequential amount, if any. b) The Respondents are directed to release the goods within two weeks from the execution of such a bond. c) All contentions regarding classification are kept open for appropriate proceedings. d) Rule is made absolute in the aforesaid terms. e) The Writ Petition is disposed of. f) No order as to costs.
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