Disposed

M/s.Isha Exim v. The Commissioner of Customs

Madras HC1 Feb 2023WP/34569/2022

Case brief

AI extract

What is this about?

The High Court directed the petitioner to file an application under Section 110-A of the Customs Act for provisional release of detained Supari goods, irrespective of pending adjudication on prohibitions. The court remanded the matter to authorities to decide merits based on advance rulings and lab reports within three weeks.

What did the court decide?

Direction to submit application under Section 110-A of the Customs Act, 1962 for provisional release of detained goods.

M/s.Isha Exim Vs The Commissioner of Customs — Company and Corporate | Madras HC (2023)

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W.P.No.34569 of 2022 etc., batch

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 01.02.2023

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CORAM:

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THE HONOURABLE MR.JUSTICE ABDUL QUDDHOSE

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W.P.Nos.34569, 34575, 34576, 34579, 34582 & 34584 of 2022 & connected W.M.Ps.

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W.P.No.34569 of 2022

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M/s.Isha Exim, P-586, Block N, New Alipore, Kolkata - 700053, Represented by its, Proprietor Shri Prabal Kumar Kundu ... Petitioner

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vs.

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1.The Commissioner of Customs, Chennai - II Commissionerate, Custom House, No.60, Rajaji Salai, Chennai - 600 001.

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2.The Assistant / Deputy Commissioner of Customs, Group-1B, Custom House, No.60, Rajaji Salai, Chennai - 600 001. ...Respondents

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Prayer: Writ petition filed under Article 226 of the Constitution of India for writ of Mandamus directing the respondents, more particularly the second respondent to release the goods viz., "Unflavoured Supari Betelnut Product known as Supari" imported vide Bills of Entry No.2424171 dated

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1/13

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https://www.mhc.tn.gov.in/judis

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W.P.No.34569 of 2022 etc., batch

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13.09.2022, forthwith on the basis of Advance Ruling No.AAR/44/Cus/02/2017 dated 31.03.2017 and issuance of a Detention Certificate for waiver of Demurrage / Container Detention Charges, in terms of Regulation 6(1)(I) of the Handling of Cargo in Customs Areas Regulation 2009 read with Regulation10(1)(I) of the Sea Cargo Manifest and Transshipment Regulation 2018.

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For Petitioner : Mr.Vijaya Narayan, Senior Counsel Assisted by Dr.S.Krishanand For Respondents : Mr.V.Sundareswaran, Senior Panel Counsel

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COMMON ORDER

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These writ petitions have been filed seeking for provisional release of

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the imported goods vide the following Bills of Entries:

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*Writ Petition*	*Bills of E*	*ntry* *Advance Ruling*	*Quantity* *(in Metric* *tonne)*
34569 of 2022	2424171	dated AAR/44/Cus/02/2017	189.000
	13.09.2022	dated 31.03.2017
34575 of 2022	2867208	dated AAR/44/Cus/02/2017	135.000
	13.10.2022	dated 31.03.2017
34576 of 2022	2867223	dated AAR/44/Cus/02/2017	135.000
	13.10.2022	dated 31.03.2017
34579 of 2022	2599722	dated AAR/44/Cus/02/2017	135.000
	24.09.2022	dated 31.03.2017

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https://www.mhc.tn.gov.in/judis

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W.P.No.34569 of 2022 etc., batch

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*Writ Petition*	*Bills of Entry*	*Advance Ruling*	*Quantity* *(in Metric* *tonne)*
34582 of 2022	2867225 dated	AAR/44/Cus/02/2017	135.000
	13.10.2022	dated 31.03.2017
34584 of 2022	2424168 dated	AAR/44/Cus/02/2017	135.000
	13.09.2022	dated 31.03.2017

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Heard Mr.Vijay Narayan, learned Senior Counsel representing Dr.S.Krishnanandh, learned counsel for the petitioner in all the writ petitions and Mr.V.Sundareswaran, learned Senior Panel Counsel appearing for the respondents in all the writ petitions.

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The petitioner has imported Supari from Thailand. According to the respondents, they are prohibited goods, whereas the petitioner categorically contends that they are not. According to the petitioner, as per the Advance Ruling dated 07.08.2015 in respect of M/s.Excellant Betelnut Products Pvt. Ltd., Nagpur, the subject goods namely Supari will fall under Chapter 21 of the Customs Tariff Act, 1975 and therefore, they are not prohibited goods. The relevant portion from the Advance Ruling dated 07.08.2015 in the case of M/s.Excellant Betelnut Products Pvt. Ltd., Nagpur which the petitioner relies upon is extracted hereunder:

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https://www.mhc.tn.gov.in/judis

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W.P.No.34569 of 2022 etc., batch

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“Chapter 21 provides Supplementary Notes, Note No.2 reads as under:

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“In this Chapter “Betel Nut” product known as “SUPARI” means any preparation containing Betel-Nuts, but not containing any one or more of the following ingredients, namely; Lime, Katha (catechu), and tobacco whether or not containing any other ingredients, such as Cardamom, Copra or menthol”. The case of the applicant is that the products should ordinarily be covered under Entry 21069030 which is, as under: “Betel Nut Product as Supari”.

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The petitioner categorically contends that the product Supari does not contain Lime, Katha (catechu) and Tobacco and also does not contain any other ingredients such as Cardamom, Copra or Menthol. Hence according to the petitioner, the product Supari will fall only under Chapter 21 of the Customs Tariff Act, 1975 and they are not prohibited goods for import. The petitioner also relies upon the Advance Ruling given to the petitioner dated 31.03.2017 and according to them, even in the said Advance Ruling, it has been made clear that the product Supari would only fall under Chapter 21 of the Customs Tariff Act, 1975. The relevant portion of the said Advance Ruling dated 31.03.2017 is extracted hereunder:

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https://www.mhc.tn.gov.in/judis

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W.P.No.34569 of 2022 etc., batch

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"Supplementary Note 2 to Chapter 21 (Miscellaneous edible preparations) defines Supari as under :

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In this chapter 'Betelnut product known as supari' means any preparation containing Betelnuts, but not containing any one or more of following ingredients, namely lime, katha (Catechu) and tobacco whether or not containing any other ingredients such as cardamom, copra or menthol."

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During the pendency of these writ petitions, by order dated 16.11.2022, this Court directed (a) Doctors' Analytical Laboratories Pvt., Ltd., R.809, TTC Rabale MIDC, Thane-Belapur Road, Navi Mumbai - 400 701 and (b) Arecanut Research and Development Foundation (R), Varanasi Towers, Mission Street, Mangalore -575 001, Karnataka, to test the samples of the petitioner's products and submit their respective reports thereafter. In the said order, the learned Single Judge of this Court has also observed in paragraph 6 as follows:

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"6. What is prohibited in terms of Chapter-8 are whole/split/ground, areca nuts. Chapter 21 on the other hand, refers to 'supari' and the order of the AAR refers to all four types of the supari having been subject to various processes, culminating in bite sized pieces, either with, or

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https://www.mhc.tn.gov.in/judis

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W.P.No.34569 of 2022 etc., batch

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without permitted additives, fit for human consumption. This is on the other hand. Thus, the description under the Explanation to Chapter 21, must be seen in alignment with the use of the word preparation, and to mean that even betelnuts, processed and prepared for human consumption, though unflavoured, will constitute 'supari'. This aspect of the matter must be taken note of by the assessing authority in the ensuing proceedings."

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Pursuant to the interim direction given by this Court on 16.11.2022 referred to supra, the aforesaid two laboratories have submitted their respective reports. According to the petitioner, both the reports are in their favour as it has been made clear in those reports that the product Supari imported by the petitioner does not contain any other product, but they are only small cut pieces of Areca Nuts/Betal Nuts commonly known as Supari.

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However, learned Standing Counsel appearing for the respondents would submit that the Supari imported by the petitioner will fall only under Chapter 8 of the Customs Tariff Act, 1975 and therefore, they are prohibited goods. According to him, the goods were rightly detained by the Customs Authorities as they are prohibited goods. He would also submit that till date,

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https://www.mhc.tn.gov.in/judis

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W.P.No.34569 of 2022 etc., batch

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no proper reply has been sent by the petitioner to the Show Cause Notice issued by the Customs Authorities.

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Learned Standing Counsel appearing for the respondents in support of his contention, has relied upon the decision of the Cestat, South Zonal Bench, Chennai, in the case of S.T.Enterprises vs. Commissioner of Customs (Chennai VII) reported in 2021 (378) E.L.T. 514 (Tri. - Chennai).

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According to him, the Hon'ble Supreme Court has also confirmed the aforesaid decision by its order dated 19.03.2021.

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Section 110-A of the Customs Act, 1962 reads as follows:

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"110A. Provisional release of goods, documents and things seized pending adjudication.—Any goods, documents or things seized under section 110, may, pending the order of the adjudicating officer, be released to the owner on taking a bond from him in the proper form with such security and conditions as the Commissioner of Customs may require."

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As seen from section 110-A of the Customs Act, 1962, an independent decision will have to be taken by the Customs Authorities with 7/13

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https://www.mhc.tn.gov.in/judis

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W.P.No.34569 of 2022 etc., batch

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regard to the request made by any importer seeking for provisional release of the detained goods which has been detained under section 110-A of the

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Customs Act, 1962 as in the present case. Whether the petitioner has responded to the Show Cause Notice issued by the Customs Authorities or not is immaterial for the purpose of deciding the application seeking for provisional release of the detained goods under section 110-A of the Customs Act, 1962. As seen from Section 110-A of the Customs Act, 1962, pending the order of the Adjudicating Authority, the goods may be provisionally released to the owner or the bank holder on taking a bond from him in a proper form with such security and conditions as the Adjudicating Authority may require.

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Therefore, no prejudice would be caused to the respondents, if the petitioner is allowed to submit an application under section 110-A of the Customs Act, 1962 seeking for provisional release of the detained goods and a direction is issued to the respondents to consider the said application on merits and in accordance with law, in the light of the contentions raised by the petitioner in these writ petitions within a time frame to be fixed by this Court.

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https://www.mhc.tn.gov.in/judis

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W.P.No.34569 of 2022 etc., batch

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This Court is not expressing any opinion on the merits of the

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petitioner's application to be filed under section 110-A of the Customs Act as it is for the respondents to consider the same on merits and in accordance with law.

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For the foregoing reasons, this Court directs the petitioner to submit an application to the second respondent under section 110-A of the Customs Act, 1962, within a period of one week from the date of receipt of a copy of this Order, seeking for provisional release of the goods in respect of the following Bills of Entries:

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*Writ Petition*	*Bills of E*	*ntry* *Advance Ruling*	*Quantity* *(in Metric* *tonne)*
34569 of 2022	2424171 13.09.2022	dated AAR/44/Cus/02/2017 dated 31.03.2017	189.000
34575 of 2022	2867208 13.10.2022	dated AAR/44/Cus/02/2017 dated 31.03.2017	135.000
34576 of 2022	2867223 13.10.2022	dated AAR/44/Cus/02/2017 dated 31.03.2017	135.000
34579 of 2022	2599722 24.09.2022	dated AAR/44/Cus/02/2017 dated 31.03.2017	135.000
34582 of 2022	2867225 13.10.2022	dated AAR/44/Cus/02/2017 dated 31.03.2017	135.000

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https://www.mhc.tn.gov.in/judis

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W.P.No.34569 of 2022 etc., batch

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*Writ Petition*	*Bills of Entry*	*Advance Ruling*	*Quantity* *(in Metric* *tonne)*
34584 of 2022	2424168 dated	AAR/44/Cus/02/2017	135.000
	13.09.2022	dated 31.03.2017

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On receipt of the said application, the second respondent shall

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pass final orders on merits and in accordance with law, within a period of three weeks thereafter, after granting one personal hearing to the authorised representative of the petitioner and after giving due consideration to the following viz.,

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(a) Advance Ruling dated 07.08.2015 in respect of M/s.Excellant

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Betelnut Products Pvt. Ltd., Nagpur;

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(b) Advance Ruling dated 31.03.2017 in respect of the petitioner

herein;

2022;

(d) Report of the Doctors' Analytical Laboratories Pvt., Ltd., Navi

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Mumbai dated 20.12.2022; and

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(e) Arecanut Research and Development Foundation (R), Mangalore,

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Karnataka dated 06.12.2022.

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https://www.mhc.tn.gov.in/judis

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W.P.No.34569 of 2022 etc., batch

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With the aforesaid directions, these writ petitions are disposed of.

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No costs. Consequently, connected miscellaneous petitions are closed.

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01.02.2023

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Note: Issue order copy on 02.02.2023.

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Index: Yes/No Speaking order/Non-Speaking Order Neutral Citation : Yes/No

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11/13

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W.P.No.34569 of 2022 etc., batch

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1.The Commissioner of Customs, Chennai - II Commissionerate, Custom House, No.60, Rajaji Salai, Chennai - 600 001.

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2.The Assistant / Deputy Commissioner of Customs, Group-1B, Custom House, No.60, Rajaji Salai, Chennai - 600 001.

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12/13

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https://www.mhc.tn.gov.in/judis

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W.P.No.34569 of 2022 etc., batch

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ABDUL QUDDHOSE, J. nl

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W.P.Nos.34569 of 2022 etc., batch

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01.02.2023

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13/13

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https://www.mhc.tn.gov.in/judis

M/s.Isha Exim v. The Commissioner of Customs

Case brief

What is this about?

What did the court decide?

M/s.Isha Exim v. The Commissioner of Customs

Case brief

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What did the court decide?

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