Consignment of Prohibited Black Pepper can be Released Provisionally u/s 110-A of Customs Act pending Adjudication: Madras HC [Read Order]

The Madras High Court directed to release of the consignment of prohibited Black pepper having an MMI of 500/per kg after testing the samples and paying the customs duty and noted that the consignment of Prohibited Black Pepper can be Released Provisionally under Section 110-A of the Customs Act, 1962 pending Adjudication M.R.J.Trading, the petitioner has challenged Notification No.21/2015-2020 dated 25.07.2018 issued by the Directorate General of Foreign Trade under the provisions of the Foreign Trade (Development and Regulation) Act. The petitioner has imported consignments of black pepper from Sri Lanka and filed a Bill of Entry on 08.02.2023. The petitioner has declared the value of the black pepper imported by the petitioner as Rs.435/- per kg. As per the aforesaid Notification No.21/2015-2020 dated 25.07.2018 issued by the Directorate General of Foreign Trade, the black pepper below the import value of Rs.500/- per kg is prohibited. The petitioner has declared the classified of the imported black pepper as under Tariff Heading 0904 11 90 which is admittedly prohibited in terms of the above Notification. The petitioner submitted that although the validity of the above Notification No.21/2015-2020 dated 25.07.2018 has been upheld by the Kerala High Court by its order dated 22.09.2021, the fact remains that the clearance of the imported black pepper can be allowed. It was submitted that even if it is eventually concluded that import is prohibited in terms of Section 125 of the Customs Act, 1962, discretion is vested to allow the goods on payment of redemption fine. The discretion is to be exercised by the proper Officer as to whether the goods have to be provisionally released or liable for absolute confiscation and destroyed or allowed to be re-exported. According to the petitioner, if the imported consignment of black pepper is of sub-standard grade there can be direction to destroy or re-export which cannot be determined unless a sample of the imported consignment is sent for testing to the lab. Further submitted that even if the goods are prohibited under Notification No.21/2015-2020 dated 25.07.2018 issued by the Directorate General of Foreign Trade under the provisions of the Foreign Trade (Development and Regulation) Act, 1992, powers are vested with the proper Officer under Section 125 of the Customs Act to allow provisional clearance under section 110A by imposing redemption fine after adjudication. The respondent on the other hand would submit that the impugned order is well-reasoned and does not require any interference. The petitioner has an alternate remedy by way of an Appeal before the Appellate Commissioner. However, the Appellate Commissioner as a Statutory Authority, will be guided by the Board in Circular No.35/2017-Cus., dated 16.08.2017 bearing reference F.No.394/13/2016-Cus(AS) which leaves no discretion with the Appellate Commissioner. The said circular prima facie is contrary to the proviso to Section 151A of the Customs Act, 1962. A single-judge bench comprising Justice C.Saravanan observed that since “there is no mandate that the goods shall be confiscated and vested with the Government. They can be released provisionally under Section 110-A of the Act pending adjudication. Taking note of the above view of the Madurai Bench of this Court, the Court is inclined to order a provisional release of the imported consignment of black pepper subject to the petitioner furnishing suitable securities in the form of a guarantee and subject to the meeting standards prescribed by the Food Safety Authority under the provisions of the Food Safety and Standards Act, 2006.” “The petitioner shall also pay Customs duty provisionally at Rs.500/- per kg. The value of Rs.500/- per kg shall be provisional. The value may be enhanced if the imported consignment of black pepper is actually of higher value. “, the court directed. Further held that the Respondent shall send the sample for testing to the approved testing laboratories recognised by the Food Safety Authorities under the said Act. If the imported consignment of black pepper meets the safety requirement under the said Act, the imported consignment shall be allowed to be cleared provisionally at Rs.500/- per kg and payment of Customs duty, after obtaining necessary security from the petitioner for any redemption fine that may be imposed on the petitioner under Section 125 of the Customs Act, 1962, after proper adjudication. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

Consignment of Prohibited Black Pepper can be Released Provisionally u/s 110-A of Customs Act pending Adjudication: Madras HC [Read Order]

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