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TMI Blog2018 (8) TMI 1411X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. The answer of the Director General of Foreign Trade, as noted, was in the affirmative. The first objection of the authorities, at this stage, therefore, would not be sufficient to permit detention of the goods. Correct declaration of the nature of imported substance - Held that:- It is nobody s case, at least as of now, that the fuel contains more than 70% HSD or conversely, less than 30% biofuel. We have already noted that the very definition of Biofuel is that it must have not more than 70% of weight of petroleum oil or oils obtained from bituminous minerals. This is not disputed by the Department. Under the circumstances, we would not prevent the Department from carrying out further investigation. Nevertheless, only on this ground, the detention of goods cannot be permitted. Correct rate of duty - Held that:- In the facts of the case, therefore, while not preventing the Department from carrying out further investigation and adjudicating the entire issue on both counts, whether the imported goods happen to be Biodiesel as declared or HSD as complained and the correct rate of duty leviable therein, the provisional release of goods is directed subject to certain safeguard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permitting clearance, which read as under; 2. Import of Biodiesel / Biofuels is not allowed under National Policy on Biofuels. However, in this regard, it is to inform that opinion of competent authority in the Ministry of Petroleum Natural Gas has been sought regarding applicability of National Policy on Biofuels to subject import consignment and reply is awaited till date. 3. Further, it is also informed that only Biodiesel (as defined in Note 7 to Chapter 38) is eligible for exemption under entry 80A of Schedule II of Notification No. 01/2017 Integrated Tax (Rate), dated 28th June 2017 as amended by Notification NO. 7/2018 Integrated Tax (Rate) dated 25th January, 2018. Since the subject goods are mixture of Biodiesel and Petroleum oil or oils obtained from bituminous minerals , hence IGST @ 18% as mentioned at Sl. No.453 of schedule III of Notification NO. 01/2017 Integrated Tax (Rate), dated 28th June 2017 would be applicable. 4. The petitioner thereupon filed the present petition. 5. According to the petitioner, the imported material is Biodiesel, which is, as per the prevailing import policy free for import. The petitioner had, in fact, writte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it HSD, was at any rate, less than 70%. 8. In this background, we may refer to the three objections of the Department for clearance of the goods, which are; (i) that Biodiesel is not free for import as per the current policy of the Government of India (ii) that proper IGST has not been discharged and (iii) that, in any case, it is doubtful whether the product is Biodiesel or HSD. Incidentally, it is undisputed that import of HSD is restricted. 9. In the context of the first objection, the Department heavily relies on a Government of India Notification dated 04.06.2018 issued by the Ministry of Petroleum and Natural Gas, under which the policy called National Policy of Biofuels 2018 was notified. The Preamble to this Notification inter alia states as under; India is one of the fastest growing economies in the world and will continue to enjoy the demographic dividend for few decades. The Development Objectives focus on Samavesh Inclusion, shared vision of National development, technology upgradation capacity building, economic growth, equity and human well being. Energy is a critical input towards raising the standard of living of citizens. The energy strategy of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts. Subsection thereof provides that the Central Government may, by an order published in the Official Gazette, make provision for prohibiting, restricting or otherwise regulating, in all cases or specified class of cases, the import and export of goods or services or technology. Sub-section 3 of Section 3 provides that all goods to which any order under sub-section 1 applies, shall be deemed to be goods, the import and export of which has been prohibited u/s.11 of the Customs Act and that all the provisions of that Act shall have effect accordingly. 12. It would, thus, prima facie appear that the promulgation of Foreign Trade Policy in terms of Section 5 of the Act would not be sufficient to change the category of a product from being freely importable to the import of which is restricted. Such restrictions are envisaged under sub-section 2 of Section 3 of the Act. No Notification under the said provision has been issued. Further, in the present case, the petitioner had sought a clarification from the Director General of Foreign Trade whether the import of the goods is free. The answer of the Director General of Foreign Trade, as noted, was in the affirmative. The first object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars that this dispute is also closely correlated to the correct composition of the goods. The complainant has argued that if the imported goods happen to be HSD, then the same would invite higher rate of IGST. The Department seems to be canvassing that such rate of duty would be 18% for HSD as compared to 12% paid by the petitioner on Biodiesel. This issue can, even otherwise, be adjudicated over a period of time. At best, the Department can seek safeguard for revenue. 16. In the facts of the case, therefore, while not preventing the Department from carrying out further investigation and adjudicating the entire issue on both counts whether the imported goods happen to be Biodiesel as declared or HSD as complained and the correct rate of duty leviable therein, we propose to direct the provisional release of goods subject to certain safeguards. In any case, if it is, ultimately, found that the goods were mis-declared, the Customs Act, particularly, Sections 111 and 112 therein, provide for adequate penalty and other adverse consequences. 17. Under the circumstances, the respondents shall permit provisional clearance of goods upon the petitioner providing Bond for the diffe ..... 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