Importer Brought Restricted Insecticides Unknowingly: CESTAT Allows Re-Export Citing Goods Not Prohibited [Read Order]

The Allahabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that re-export of mistakenly imported restricted insecticides is permissible when the import was a bona fide error and the goods are not prohibited under law.

Best Crop Science Pvt. Ltd., the appellant, imported a consignment declared as “3-Chloro-4-(1,1,2-Trifluoro-2-(Trifluoromethoxy)Ethoxy)Benzenamine” under a Bill of Entry dated 12.08.2024. Upon examination, the Directorate of Revenue Intelligence (DRI) found that the goods actually contained "Novaluron", a restricted insecticide under the Insecticides Act, for which the appellant did not possess the mandatory registration certificate. The consignment was detained, and later seized by DRI.

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Following this, the foreign supplier acknowledged an inadvertent shipping error and requested the appellant to arrange re-export of the consignment. The appellant approached customs authorities seeking permission for re-export under CBIC Circular No. 04/2015-Customs and Section 110A of the Customs Act, 1962, citing financial and strategic losses due to the continued detention. The request was rejected on the grounds that the goods were restricted and liable for absolute confiscation.

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The appellant's counsel argued that they never intended to import Novaluron, that the mistake originated from the supplier, and that the goods, though restricted, were not prohibited. They argued that under prevailing legal principles, restricted goods can be re-exported without penalty when imported inadvertently and not intended for home consumption.

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The revenue counsel alleged mis-declaration under Sections 111(d) and 111(m) of the Customs Act and maintained that the importer was not entitled to re-export since they had claimed ownership by filing the bill of entry.

The two-member comprising Judicial Member P.K. Choudhary observed that the appellant had quickly raised concerns with the supplier, sought re-export before receiving chemical analysis results, and did not benefit from the mistaken import. Referring to precedents such as Siemens Public Communication Networks Ltd. and Supreme Court rulings in Atul Automations Pvt. Ltd., the tribunal distinguished between restricted and prohibited goods.

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The tribunal explained that since the goods were restricted and not inherently dangerous or prohibited, and as the mistake was admitted by the supplier, confiscation was not justified. The tribunal held that allowing re-export caused no harm to national interest and upheld the appellant’s plea.

The appeal was allowed, setting aside the order of the customs authority. The tribunal directed the Principal Commissioner of Customs to permit unconditional re-export of the consignment and grant consequential relief to the appellant.

To Read the full text of the Order CLICK HERE

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