Detention is Void since Customs Authorities relied on Test Report of Private Organisation: Madras HC [Read Judgment]


In a recent ruling, the Madras High Court held that detention is void since the Customs Authorities relied on test report of a private organization.

The Assessee Company in the instant case imported 27,000 kgs of goods, classified as ‘unflavoured supari’ from Indonesia, vide Commercial Invoice, at US dollar 48600. The Assessee filed a bill of entry for clearance of the aforesaid goods at the time of the goods arrived at Chennai airport.

Thereafter, the goods were assessed to duty and out of charge was accorded in respect of the said Bill of Entry, under Customs Tariff) Heading as ‘unflavoured supari’. The officer of the D.R.I. was of the view that the Assessee misclassified the goods and conducted the examination of the goods and also recorded the statements.

The commissioner of Customs submitted before the Advance Ruling Authority that the betel nuts imported by the petitioner should ordinarily be covered under CTH, classified as ‘supari’. He further submitted that, Therefor the query raised by the Assessee before the Advance Ruling Authority may be answered in the affirmative that the products shall be covered under Chapter 21 and not under Chapter 8 of the Customs Tariff Act and the Assessee being armed with the order passed by the Advance Ruling Authority, the consignment imported by the petitioner has been detained, Mahazar has been recorded and subsequently, the impugned seizure memorandum has been issued.

On the other hand counsel for the Assessee Advocate Dr S. Krishnanandh submitted that since the goods were detained at the instance of the D.R.I., they are entitled to Demurrage and Detention Certificate for waiver of the warehousing and demurrages from the date of detention till the date of release of the goods.

After considering the rival submissions of both the parties, Justice T.S.Sivagnanam observed that “the seizure memorandum only refers to the test report of the Private Organization and not a Central Laboratory to state that the correct classification of goods. Thus the findings of the Revenue though prima facie in nature, is clearly contrary to the order/Ruling passed by the Advance Ruling Authority as well as the stand by the Commissioner of Customs, in his reply to the Advance Ruling Authority, thus the impugned seizure memorandum and the detention of the cargo by the respondents is wholly unjustified”. Therefore the detention is considered to be void and the authorities are directed to release the cargo in question.

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