2025(03)LCX0008
The Commissioner of Customs
Versus
Universal Impex
W.A.Nos. 3647 of 2024 decided on 04-03-2025
IN THE HIGH COURT OF JUDICATUREAT MADRAS
DATED: 04.03.2025
CORAM :
THE HON'BLEMR.K.R.SHRIRAM, CHIEFJUSTICE
AND
THE HON'BLEMR.JUSTICE MOHAMMEDSHAFFIQ
W.A.Nos.3647 and 3648 of 2024
and C.M.P.Nos.28679 and 28696 of 2024
W.A.No.3647 of 2024:
1.The Commissioner of Customs,
Chennai Import, Chennai –II Commissionerate,
Customs House, Rajaji Salai,
Chennai-600 001.
2.The Additional Commissioner of
Customs (Group-1),
Chennai Import, Chennai –II Commissionerate,
Customs House, Rajaji Salai,
Chennai-600 001.
3.The Assistant Commissioner of
Customs,
Chennai Import, Chennai –II Commissionerate,
Customs House, Rajaji Salai,
Chennai-600 001.
4.The Assistant Commissioner of
Customs (SIIB),
Chennai –IIICommissionerate,
Customs House, Rajaji Salai,
Chennai-600 001.
.. Appellants
vs
M/s.Universal Impex,
G-39, A.P.M.C. Market –1, Phase –2,
Vashi (Turbhe),
Navi Mumbai –400 705
rep. by its Proprietor Sarfaj Jaliyawala
.. Respondent
W.A.No.3648 of 2024:
1.The Commissioner of Customs,
Chennai Import, Chennai –II Commissionerate,
Customs House, Rajaji Salai,
Chennai-600 001.
2.The Additional Commissioner of
Customs (Group-1),
Office of the Commissioner of Customs,
Chennai –II(Imports),
No.60, Rajaji Salai,
Chennai-600 001.
3.The Assistant/Deputy
Commissioner of Customs (Group-1),
Office of Commissioner of Customs,
Chennai –II(Imports),
No.60, Rajaji Salai,
Chennai-600 001.
.. Appellants
vs
M/s.Neena Enterprises,
Shop No.8, First Floor 5-1-767/8/FF,
Vithal Das Market, Koti, Hyderabad,
Telangana-500 095
rep. by its Authorised Signatory Gagan Uppal.
.. Respondent
Prayer: Appeals filed under Clause 15 of the Letters Patent against the common order dated 22.11.2024 passed by the learned Single Judge in W.P.Nos.23836 and 24237 of 2024.
For Appellants
: Mr.AR.L.Sundaresan
in both appeals
Addl. Solicitor General of India
for Mr.K.Umesh Rao
Sr. Standing Counsel
For Respondent
: Mr.B.Kumar
Senior Counsel
for Mr.B.Sathish Sundar
in W.A.No.3647 of 2024
: Dr.S.Krishnanandh
in W.A.No.3648 of 2024
COMMON JUDGMENT
(Delivered by the Hon'ble Chief Justice)
By consent,
the appeals were taken up for hearing at the admission stage.
2. Appellant revenue is impugning an order pronounced on 22nd November, 2024, by
which, a learned Single Judge was pleased to quash the orders-in-original dated
22nd July, 2024 passed by the Additional Commissioner of Customs,
Group-1, second appellant herein.
3. As the facts are almost identical, save and except the variance in the Bill
of Entry numbers and quantity of goods imported and as what is impugned is a
common order and judgment, we decide to dispose these appeals by this common
judgment.
4. Respondents had imported goods, which were declared as roasted areca nuts,
from Indonesia. According to respondents, these goods would fall under Chapter
20 of Tariff 2008 1920 and were declared as such.
5. According to appellant revenue, what is imported was raw areca nuts, which
would fall under Chapter 8 of Tariff 0802 80. Both areca nuts, whether raw or
roasted, are not prohibited goods and can be imported. For the importation of
raw areca nuts, a minimum price is fixed at Rs. 351/- per kg., whereas no such
minimum price was fixed for roasted areca nuts.
6. Respondent importers filed applications before the Customs Authority for
Advance Rulings in terms of Section 28H of the Customs Act, 1962. Applications
seeking advance rulings were made on the classification of roasted areca nuts
(whole/cut/split), which the party intended to import.
7. In the case of Neena Enterprises, a ruling was given on 1st March,
2023, in which paragraph 6.17 reads as under:
“6.17 Among many objections I find one observation of the jurisdictional Customs Commissionerate quite important. The applicant's claim that after repeated roasting for 2-3 days under 130- 150 degrees Celsius in a roasting oven due to which the water content is reduced to 10-15% is a complete misrepresentation of facts. Jurisdictional Commissionerate has stated that it is evident by the fact available with this office vide (based on) test reports that a raw betel nut falling under Chapter 8 has a moisture content of less than 10% and the betel nut undergoing repeated roasting and severe heat treatment has a water content 10 to 15% appears incorrect. I agree with this observation of the Commissionerate. As mentioned earlier, actual samples of the imported goods can be drawn and tested for ascertaining the actual moisture content by the jurisdictional Customs Commissionerate at the time of Customs Compliance Verification (CCV) of the imported goods before clearance (Out of Charge (OOC) is granted to ensure that the goods are conforming to what is declared in the import documents. I also do not agree with the comment of the jurisdictional commissionerate that there was any misrepresentation of facts or non-observance of due process. Applicant has a right to present its case during the course of personal hearing. Veracity of applicant's claim related to issues like moisture content can be very well examined by the jurisdictional Customs Commissionerate at the time of actual import by drawing and testing of the samples of imported goods from the concerned agency.”
8. In the case of Universal Impex, a ruling dated 12th May, 2023 was given, where paragraph 4.17 reads as under:
“4.17 I have perused a test report issued by ABC Techno Labs India Pvt. Ltd., Chennai dated 31.3.2023 on the samples of roasted areca nut whole & split in which the test result indicates the moisture content, a test parameter, of the samples in the range of 3.34% to 3.84%. Moisture content in raw areca nut is found to be generally in the rage on 10-15%. As per applicant this test report indicates that the products were subjected to the roasting process. This aspect of product testing is a part of Customs Compliance Verification (CCV) process on importation of goods. Jurisdictional Customs Commissionerate carry out process of testing of imported goods with the help of concerned government partner agencies (GPAs) to cross-examine accuracy of declaration of goods in the import documents namely a Bill of entry and it's supporting documents before an out of charge (OOC) is granted. Hence, the utility of sample test report at this stage is limited to only support applicant's contention that the goods were subjected to the process of roasting and not merely to a moderate heat treatment.”
9. Appellants did not permit
clearance of the goods holding that what was imported was raw areca nuts and not
roasted areca nuts. Show cause notices were issued and orders-in-original dated
22nd July, 2024 were passed holding that the goods imported were raw
areca nuts and not roasted areca nuts. The orders-in-original levied various
amounts as penalty, customs duty and also ordered for confiscation. Against the
orders-in- original, writ petitions were filed and the writ petitions were
disposed of by a common order pronounced on 22nd November, 2024 i.e.,
impugned in these appeals.
10. The two issues that came up for consideration before the learned Single
Judge were: (a) whether the Court should exercise its jurisdiction under Article
226 of the Constitution of India to decide about the nature of imported areca
nuts, which were disputed questions of fact and, therefore, respondents should
be directed to exercise alternative remedy of filing an appeal?; and, (b)
whether the areca nuts imported by respondents were actually roasted areca nuts
or raw areca nuts?.
11. Learned Additional Solicitor General of India submitted compilation of test
reports. Though these reports do not state that samples tested were drawn in the
presence of the importers, still none of the reports says that the moisture
content was 10% or above. The highest in one case, we find, is 9.2%.
12. The Authority for Advance Rulings, from the portions quoted above, has
indicated that where moisture content in areca nut is found to be in the range
of 10-15%, the same would fall under the category of raw areca nut.
13. Admittedly, in these cases, the moisture contents found were all below 10%.
Even in the reports relied upon by learned Additional Solicitor General of
India, which were tendered across the bar today, it ranges from 3.79%; 7.9%;
8.1%; 9.2%; 7.8% and 5.4%. The maximum being 9.2%. None of the samples drawn
indicate it to be 10% or above.
14. The learned Single Judge has also considered the admitted position that
there is no definition as to what is roasted areca nuts. Learned Additional
Solicitor General of India pointed out that the learned Single Judge has used
his so-called personal experience in view of his family background to determine
what is roasted areca nuts or what is raw areca nuts. Even if we ignore that one
paragraph from the impugned judgment, still we would find that the learned
Single Judge was justified in his approach. Admittedly, the rulings of the
Authority for Advance Rulings have attained finality. In fact, it was challenged
by the department before this Court in C.M.A.Nos.600, 1206 and 1750 of 2023,
which came to be disposed, vide common judgment dated 1 st August, 2023. A
Co-ordinate Bench of this Court, of which one of us [Mohammed Shaffiq, J.] was a
member, declined to interfere with the ruling of the Authority for Advance
Rulings. The ruling has, therefore, attained finality.
15. Therefore, as per the parameters fixed by the Authority for Advance Rulings,
if the moisture content is between 10% and 15%, the same would be considered as
a raw areca nut and anything below the said category would be considered as
roasted areca nut. The said finding has attained finality. All the laboratory
reports also state that the moisture content of the areca nuts is below 10%.
Therefore, we find no reason to interfere with the impugned order.
16. Appeals are dismissed. There shall be no order as to costs. Consequently,
interim applications also stand dismissed. The department shall permit clearance
of the goods within a week of this judgment being uploaded.
17. Learned Additional Solicitor General of India indicates that Revenue would
be challenging this judgment in the Apex Court.
18. In view thereof, clearance be permitted against the importers giving a
personal bond to be liable for any difference and import duty or penalty etc.
(K.R.SHRIRAM, C.J.)
(MOHAMMEDSHAFFIQ, J.)
04.03.2025
Index : Yes/No
NC : Yes/No
THE HON'BLECHIEFJUSTICE
AND
M OHAMMEDSHAFFIQ, J.
W.A.No s.3647 and 3648 of 2024
04.03.2025