Confiscation Of Goods By The Customs Dept. For More Than Two Years Without Any Fault Of Assessee: CESTAT Waives Of Detention And Demurrage Charges
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of Anil Choudhary (Judicial Member) and C.J. Mathew (Technical Member) held that as the goods were lying under seizure and subsequent confiscation by the Customs Department for more than two years, for no fault of the appellant/assessee, a grant of waiver of detention and demurrage charges...
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of Anil Choudhary (Judicial Member) and C.J. Mathew (Technical Member) held that as the goods were lying under seizure and subsequent confiscation by the Customs Department for more than two years, for no fault of the appellant/assessee, a grant of waiver of detention and demurrage charges was appropriate.
The appellant, M/s. Jaymco Polymers Pvt. Ltd., is in the business of manufacturing, importing, and trading various mixed mineral hydrocarbon oils, etc., and Jethanand Rohra is the director of the appellant company.
The appellant, in the normal course of business upon import, filed 5 bills of entry for clearance of goods declared as "Mineral Hydrocarbon Oil" CTH 27101988/Mixed Mineral Hydrocarbon Oil-CTH 27101990, as freely importable. One of the raw materials the appellant imports for final products is Mineral Hydrocarbon Oil, which is a solvent. The consignment and containers were put on hold for drawing samples as revenue suspected mis-declaration. The Customs Authorities took a sample from the import consignment with respect to the Bill of Entry No. 6110507 dated 17.12.2019 on a first check basis and sent the same for testing to the Dy. Chief Chemist, JNCH, vide Test Memo No. 1059045 dated 17.12.2019.
It appeared to the department that the appellants had been importing kerosene/diesel by mis-declaring it as MHO/MMHO and IMRO in connivance with the supplier and the customs broker. The appellants have admitted to the import of prohibited goods by way of mis-declaration and to getting them cleared for home consumption.
As the provisional release was not being given, the appellant had also approached the Bombay High Court for directions to allow proper storage of the consignment, being inflammable, and had also prayed for provisional release to be allowed by the department. The department passed an order for provisional release, subject to execution of a bond of Rs. 2,90,36,082/-; a security deposit of Rs. 3,77,32,753/- on account of differential duty, fine, and penalty that may be levied at the time of adjudication; and payment of self-assessed duty, where it is not paid.
The appellant contended that the test reports issued by the DYCC/JNCH were not reliable for two reasons. Firstly, the samples were not drawn properly, as prescribed in IS 1447-1. Secondly, the test reports are not conclusive as the DYCC/JNCH have not tested all the parameters suggested in the Indian Standards for petroleum products. A test of all the parameters prescribed was mandatory to conclusively establish the identity of the alleged petroleum products (Diesel/Kerosene). Since the test reports of the so-called representative samples have not been carried out in respect of certain characteristics, the test reports are unreliable. Hence, the orders of the court below, relying on the test reports, are vitiated and fit to be set aside. Evidently, the Court below has relied upon unreliable test reports and, thus, has failed to discharge the burden of proof in support of their allegations of mis-declaration or mis-classification of the goods under dispute.
The Tribunal noted that the test reports are vitiated and not reliable as sampling has been done improperly and not in conformity with the prescribed specifications.
"We further hold that in the facts of the present case there is no scope for applying preponderance of probability or the principle of probability, as there are explicit rules and or instructions laid down for classification. We also hold that the test reports relied upon by Revenue are inconclusive," the court said.
Case Title: Shri Jethanand Rohra Versus Commissioner of Customs (Import)
Citation: Customs Appeal No. 86184 of 2021
Dated: 09.05.2022
Counsel For Appellant: Advocate N.D. George
Counsel For Respondent: Authorised Representative Manoj Das
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