S.38 Insecticides Act | Acrylonitrile Used For Non-Insecticide Purpose Is Exempted From Import Permit Mandate: Gujarat High Court

The Gujarat High Court has held that Acrylonitrile when used for non-insecticide purpose, such as manufacture of synthetic rubber, would be exempted from the mandate of import permits in view of the exemptions under Section 38 of the Insecticides Act.

Section 38 of the Act carries a non-obstante clause which states that nothing in the act shall apply to the use of any insecticide by any person for his own household purposes or for kitchen garden or in respect of any land under his cultivation. 

It further states that nothing in the act shall apply to any substance specified or included in the Schedule or any preparation containing any one or more such substances, if such substance or preparation is intended for purposes "other than preventing, destroying, repelling or mitigating any insects, rodents, fungi, weeds and other forms of plant or animal life not useful to human beings". 

The court was hearing a plea by an entity seeking direction to the respondent to allow import of Acrylonitrile without insisting on import permit as required under public notice dated 17.02.2022.

The petitioner is engaged in manufacturing and selling of synthetic rubbers like Nitrile Butadiene Rubber (NBR), High Styrene Rubber, NBR/SBR Lattices since 1986. For manufacture of their finished goods, one of the major raw materials used by the petitioners is Acrylonitrile (ACN) and out of the total quantity needed for manufacturing of finished goods, majority of Acrylonitrile is being imported by the petitioner.

All imports/exports are governed by the provisions of the Foreign Trade Policy issued under the provisions of Foreign Trade (Development and Regulation) Act, 1992. Such policies are issued from time to time to allow imports either 'free' or 'prohibits' or allows subject to certain conditions.

As per the import policy of Acrylonitrile the same is freely importable i.e. without any restriction or conditions. However, on account of some difficulties faced by trade, a circular dated 22.06.2011 clarified that the import of items listed under the Schedule to the Insecticides Act, 1968 which are used for the purposes specified in Section 38 would not be subject to the requirement of registration/import permit. For this Standing Orders/Public Notices and Trade Notices have been issued by the customs department. 

Ultimately on 17.02.2022 a public notice was issued which mandated import permits for Acrylonitrile even for non-insecticidal use. Against this the petitioner moved the high court. 

A division bench of Justice AS Supehia and Justice Pranav Trivedi referred to Section 38 of the Insecticides Act and said that it  exempts the application filed under the said provisions of law in respect of use of any insecticide by any person for his own household purposes or for kitchen garden, or in respect of any land under the cultivation.

It further exempts the import of any substance specified or included in the Schedule if it is intended for purpose other than preventing, destroying, repelling or mitigating any insects, rodents, fungi, weeds and any other forms of plant or animal life not useful to human beings. The court also noted that the petitioner was importing the substance Acrylonitrile (ACN) for manufacturing of synthetic rubbers, which is non-insecticide purpose. It said:

"Thus, the Acrylonitrile imported by the petitioner is used by them in manufacturing of goods like rubber items which would not fall in any of the purposes mentioned in Section 38 of the Act of 1968. Hence the petitioners did not apply to the Registration Committee for import of such items. The respondents have not doubted that the substance Acrylonitrile is used by the petitioners for non-insecticidal use and hence a bare reading of the provisions of Section 38 read with Section 9 of the Act of 1968 would indicate that the same will come to the rescue of the petitioners as the provisions of Section 38 of the Act of 1968 begins with the expression (non-obstante) clause 'Nothing in this Act shall apply'. Thus, the provisions of Section 38 of the Act of 1968 introduces an exemption for attracting the provisions of the Act of 1968 to the substance which are used for non insecticidal purpose". 

"Having not denied by the respondents that Acrylonitrile imported by the petitioner is for non-insecticidal use as per clause (b) of Section 38 of the Act of 1968, none of the provisions of the Act of 1968 would apply and as a consequence thereof, the requirement of registration as per Section 9 of the Act would not be mandatory and as a sequel the requirement of any import permit from respondent no.7 does not arise. It appears that respondent no.7 without application of mind to the provisions of the Act, more particularly provisions of Section 38 of the Act of 1968 had issued Public Notice which runs contrary to the intention of the Act as promulgated in Section 38 of the Act of 1968," the bench added. 

Allowing the plea the court quashed the public notice to the extent it applies to the Acrylonitrile.

Case title: APCOTEX INDUSTRIES LTD. v/s  UNION OF INDIA & ORS

R/SPECIAL CIVIL APPLICATION NO. 9705 of 2023

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