Madras High Court
The Commissioner Of Customs vs M/S.Jayasakthi Papers on 21 June, 2021
W.A.(MD)Nos.1176 and 1177 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 21.06.2021
CORAM
THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM
AND
THE HONOURABLE MRS.JUSTICE S.ANANTHI
W.A.(MD)Nos.1176 and 1177 of 2021
and
CMP(MD).Nos.5015 and 5016 of 2021
1. The Commissioner of Customs,
Customs House,
New Harbour Estate,
Tuticorin - 628 004.
2. The Assistant Commissioner of Customs,
(Special Intelligence and Investigation
Branch - SIIB), O/o Commissioner of Customs,
Customs House, New Harbour Estate,
Tuticorin - 628 004.
3. The Assistant Commissioner of Customs,
(Group-2), O/o Commissioner of Customs,
Customs House, New Harbour Estate,
Tuticorin - 628 004.
... Appellants/Respondents 1 to 3
(in both Writ Appeals)
Vs.
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W.A.(MD)Nos.1176 and 1177 of 2021
M/s.Jayasakthi Papers,
a proprietary Firm,
rep. by its Proprietor
Sri A.Manikandan
3/766 D1, Vijayalakshmi Colony,
Sivakasi, Virudhunagar District, Tamil Nadu - 626 123.
... Respondent/Petitioner
(in both Writ Appeals)
Common Prayer: Writ Appeal filed under Clause 15 of Letters Patent, against
the order of this Court made in W.P.(MD) Nos.5161 and 5528 of 2021, dated
26.03.2021.
For Appellants : Mr.B.Vijaya Karthikeyan
(in both Writ Appeals)
For Respondent : Mr.B.Sathish Sundar
(in both Writ Appeals)
COMMON JUDGMENT
[Judgment of the Court was delivered by T.S.SIVAGNANAM,J.]
These appeals filed by the Commissioner of Customs, Tuticorin and
two others are directed against the common order dated 26.03.2021, in
W.P(MD).Nos.5161 and 5528 of 2021.
2. These writ petitions were filed by the respondent herein, praying
for issuance of a Writ of Mandamus to direct the appellants to release the goods
imported in Bill of Entry Nos.2485273 and 2485600 respectively, dated
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W.A.(MD)Nos.1176 and 1177 of 2021
25.01.2021, whereunder, they sought for clearance of the consignment which
has been described as 'two-sided coated paper in rolls'.
3. The learned Writ Court allowed the writ petition and while doing
so, held that the seizure and detention of goods were not warranted and
consequently, issued directions for release of the goods. The correctness of the
said order is being questioned before us by the Revenue by way of these
appeals.
4. We have elaborately heard Mr.B.Vijaya Karthikeyan, learned
Senior Standing Counsel appearing for the appellants and Mr.B.Sathish Sundar,
learned counsel appearing for the respondent-importer.
5. Before we examine as to whether the stand taken by the
Department before us is justified or not, we need to point out that the relief
granted by the learned Writ Court is far beyond the prayer sought for as the
entire adjudicatory mechanism has been set at naught, thereby virtually
quashing the entire proceedings of seizure and detention, when the prayer
sought for by the writ petitioner was only for a release of the goods. The lis
before the Writ Court was to examine as to whether the detention/seizure of the
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W.A.(MD)Nos.1176 and 1177 of 2021
goods was justified and for such purpose, all that is required to be considered is
whether the importer has made out a prima facie case for clearance of the goods
with or without any conditions. Beyond that, the learned Writ Court could not
be justified in rendering a finding, which will have a direct impact on the
adjudicatory process. To be noted that the respondent-writ petitioner did not
approach the Court for direction to the appellants to consider their case for
provisional release of the imported consignment and that such a request was
kept pending for a prolonged period. Nor it is the case of the respondent that
any order was passed by the Department either accepting the request for
provisional release with or without conditions or rejecting the request for
provisional release. Since the prayer sought for by the respondent-writ
petitioner was for issuance of an innocuous relief, the Court was required to
confine itself to the relief sought for and not traverse beyond the boundaries,
which will have impact on the adjudication process. Therefore, in these appeals,
we are required to examine as to whether the respondent-importer has
established a prima facie case for release of the goods pending adjudication and
consequently, all findings rendered by the learned Writ Court on the merits of
the matter need to be vacated and accordingly, stand vacated.
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W.A.(MD)Nos.1176 and 1177 of 2021
6. As mentioned above, we need to examine as to whether the
respondent-writ petitioner has made out a prima facie case before the Court for
release of the goods. The undisputed facts are as follows:
(i) The respondent-writ petitioner imported paper from Canada and in
the Bill of Entry, they prescribed the consignment as 'One-side coated paper and
two-side coated paper'. The Bill of Entry was filed through the automated
process, wherein, the respondent-importer classified the product to fall under
ITC (HS) Code 4810 1390. The appellant-Department entertained a doubt with
regard to the nature of the goods imported and called for particulars from the
importer including the detailed packing list.
(ii) On going through the packing list, the Revenue opined that the
imported consignment is classifiable under 'Stock Lot of Paper' as per the
Director General of Foreign Trade notification No.45/2015-2020, dated
31.01.2020 and such import is prohibited. The original notification as it stood
prior to 2017, the product imported and classified under EXIM Code 4810 13
90 is freely importable, but subsequently, on account of an amendment, the HS
Code 4810 of Chapter 48 of ITC (HS) 2017 was revised from "free" to
"prohibited". Under the amended notification on and after 2017, import of
"Stock Lot" is prohibited under any one of the sub-classifications, which fall
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W.A.(MD)Nos.1176 and 1177 of 2021
under EXIM Code 4810.
(iii) On account of the amendment, which came into effect from 2017,
it appears that there was serious doubts raised by the importers and
representations were made which led to the issuance of clarification in Trade
Notice No.8/2020-2021, dated 04.05.2020. In the said Trade notice, it has been
noted that number of representations were received seeking clarification with
regard to description of 'Stock Lot' used in the said notification and accordingly,
the matter was examined in consultation with the Department for Promotion of
Industry and Internal Trade (DPIIT) and the following clarification was issued:
"a. Import of different kinds of paper description under all the
22 tariff lines covered under ITC(HS) 4810 is 'Free'.
b. Importers should mention correct description of paper
being imported at 8 digit number ITC(HS) 4810. They are expected to
clearly specify quantities of paper under each 8 digit ITC(HS)
separately.
c. If the whole imported paper consignment is without
description for each category of paper as a Stock lot.
d. The Customs would check before allowing consignment
where the description of imported paper matches with any/some of the 8
digit entries under ITC(HS) 4810. The Customs would allow
consignment where paper of different description are intended to be
imported and bundled together under ITC(HS)4810 as a Stock lot.
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W.A.(MD)Nos.1176 and 1177 of 2021
e. In case paper proposed to be imported is not covered in any
of the existing 8 digit ITC (HS) 4810 under ITC(HS) 4810, Trade is
advised to request Department of Revenue for the creating of new tariff
line with proper justification."
(iv) The appellant-Department seek to bring the respondent's case
under Clause-d of the above referred clarification. According to the appellants,
the packing list shows that the product is of different sizes and different GSMs
and therefore, it would fall within the meaning of "different description" and
therefore, a "Stock Lot" and consequently, it is a prohibited import.
7. The learned counsel appearing for the respondent-importer has
drawn our attention to the UO Note (unofficial note) dated 24.03.2021 and it is
submitted that the Department in the second check did not dispute the
classification, but, according to them, it was a "different description", because
of different sizes and GSMs. The Revenue seeks to sustain their contention
which was advanced before the learned Writ Court as well as before us by
referring to the packing list. It is submitted that the importer have imported
LWC (Light-weight coated) paper and C2S, i.e., (two-sided coated paper) as
evident from their detailed packing list, but have declared the imported cargo as
'two-sided coated paper', as to be imported paper of different GSM, size and
hence, in order to circumvent the prohibition on the import of "Stock Lot of
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W.A.(MD)Nos.1176 and 1177 of 2021
coated paper", the importer has not mentioned the same in the invoice/Bill of
Entry, whereas, on examination of the cargo, the Stock Lot nature of the import
cargo is very much evident.
8. Therefore, it is contended that the intention of the importer is to
import "Stock Lot" of LWC (Light weight coated) paper and C2S coated paper
of different GSM and size as stock lot and as such in terms of para 2(d) of the
Trade Notice, the authorities have rightly seized the imported cargo as it is
Stock Lot.
9. The argument of the learned counsel appearing for the respondent-
importer is that at the first instance, the item description as mentioned against
EXIM Code 4810 has to be looked into before going into the sub-items, one of
which is 4810 13 19, under the category 'Other' and if the EXIM Code 4810 is
taken into consideration, the different size and GSMs will not bring the import
within the meaning of different description under Clause-2(d) of the
clarification.
10. In our considered view, it is too early for the Writ Court to express
any opinion on the issue, because, adjudication is yet to commence. However,
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W.A.(MD)Nos.1176 and 1177 of 2021
taking out of the fact that paper of all categories which has been mentioned
under EXIM Code 4810 is freely importable and only issue would be whether
the import effected by the respondent is a "Stock Lot" or not is to be decided.
11. We are of the view that the imported goods may be directed to be
released subject to the condition that importer give an undertaking to participate
in the adjudication to be done by the appellant-Department. As prefaced by us,
at the commencement of this judgment, the findings rendered by the learned
Writ Court on the merits of the matter stands vacated and the appellant-
Department is at liberty to issue show cause notice to the respondent on all
issues and afford an opportunity to the respondent to submit their reply and
participate in the adjudication proceedings.
12. In the result, these Writ Appeals are partly allowed to the extent
indicated and there will be a direction to the appellants to release the imported
consignment subject to the commencement of adjudication process by issuance
of show cause notice, which shall be done not later than sixty days from the
date of receipt of a copy of this judgment, after recording the undertaking of the
respondent-importer that they will participate in the adjudication proceedings.
Since the goods have been detained ever since January 2021, and this Court has
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W.A.(MD)Nos.1176 and 1177 of 2021
permitted release of the goods, the detention charges shall stand waived. The
appellants shall release the subject cargo within a period of three weeks from
the date of receipt of a copy of this judgment. No costs. Consequently,
connected miscellaneous petitions are closed.
Index :Yes (T.S.S.,J.) (S.A.I.,J.)
Internet :Yes 21.06.2021
pkn
Note: In view of the present lock down owing to
COVID-19 pandemic, a web copy of the order may be
utilized for official purposes, but, ensuring that the copy
of the order that is presented is the correct copy, shall
be the responsibility of the advocate/litigant concerned.
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W.A.(MD)Nos.1176 and 1177 of 2021
T.S.SIVAGNANAM, J.
and
S.ANANTHI, J.
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W.A.(MD)Nos.1176 and 1177 of 2021
21.06.2021
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