Afr High Court · 2025
Case Details
1 2025:CGHC:15241 AFR HIGH COURT OF CHHATTISGARH AT BILASPUR Order Reserved on 13/01/2025 Order Delivered on 01/04/2025 WPT No. 191 of 2024 1 - M/s Reema Associates Through Power of Attorney Holder Mr. Harish Kumar Veerani S/o Tola Ram Veerani Aged - 55 Years, --- R/o Near Government School, Near Patla Maidan, Gogaon, Raipur, District Raipur, Chhattisgarh. ... Petitioner versus 1 - Directorate of Revenue Intelligence Through Deputy Director Raipur Regional Unit 30, Panchsheel Nagar, Civil Lines, Raipur, Chhattisgarh. 2 - Customs Commissionerate Through Commissioner 3rd Floor, B-Zone, Business Space, Pipliya Kumar Nipania, Indore - 452010, Madhya Pradesh. 3 - Assistant Commissioner of Customs, Custom Circle, Raipur Inland Container Depo (ICD), Naya Raipur, Nawagaon, NH-53, Atal Nagar, Raipur, 922101, Chhattisgarh. ... Respondents For Petitioner : Mr. Kishore Bhaduri, Sr. Adv. along with Mr. Siddharth Shukla, Advocate For Respondents : Mr. A.S. Kachchwaha, Advocate (Hon'ble Shri Arvind Kumar Verma, Judge) C A V Order 1. That the present petition is being preferred by the Petitioner for direction being issued to the Respondents for provisional release of ASHUTOSH MISHRA Digitally signed by ASHUTOSH MISHRA Date: 2025.04.01 14:52:08 +0530 2 goods in terms of Section 110A of the Customs Act, 1962 relating to the goods seized under Show Cause Notice dated 9th May 2024 issued by Respondent No.2. 2. The brief facts of the case are that the petitioner was established on 30.06.2021 only for import of electrical items i.e lights etc and that the Import Export Code of Petitioner is: ADCPV0934F which was issued on 27.03.2023 and GSTIN No. 22ADCPV0934F1ZV. It is submitted that the Petitioner had Imported Electrical Items from Guangzhou, China for a value of Rs. 27,28,720. 3. Respondent No.1 based upon intelligence report found that the Petitioner has imported consignment of LED lighting chain/luminaries vide aforesaid Bill of Entries by resorting to undervaluation and thereby defrauding the government exchequer by evading payment of Customs duty. Acting upon the intelligence, Respondents had conducted examination of the containers on 29th September 2023, 30th October 2023, 31st October 2023 and prepared the Panchnama respectively. It is further alleged that during examination of the goods on 29.09.2023, the LED Lighting Chains/Luminaries appeared to be spurious that is without proper compliance of mandatory norms of BIS under IS:10322 (Part5/Section 7):2017, falling under category of compulsory certification. Also, the LED Lighting Chains/Luminaries were not found to be in compliance of the provisions of the Legal Metrology 3 (Packaged Commodity) Rules, 2011. Therefore, for further investigation, the goods were detained and handed over to the custodian for safe custody under the said Panchnama proceedings. 4. The Petitioner had filed Letters dated 8th December 2023 and 11th January 2024 with the Respondents under Section 110A of the Customs Act, 1962 (hereinafter referred to as the Act, 1962) for Provisional release of the goods after taking Bank Guarantees for differential amount of Custom Duty of Rs. 1,24,20,195. Thereafter, Show Cause Notice dated 9th May 2024 was issued for confiscation of the goods of the Petitioner under Section 28 (4) read with Section 124 of the Customs Act, 1962 wherein the proceedings are still pending adjudication. Hence this petition for seeking a direction to the respondents to provisionally release the goods seizure memorandum dated 11/11/2023 & 08/01/2024 as per Section 110A of the Customs Act, 1962.
Legal Reasoning
5. Learned counsel for the petitioner would contend that the respondents had erred in considering the effect and operation of Section 110A of the Customs Act, 1962 which provides that any goods, documents or things seized under Section 110, may, pending the order of the adjudicating authority, be released to the owner on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require. He would next contend that the respondents had not given any heed to the Letters dated 8th 4 December 2023 and 11th January 2024 filed by the Petitioner for provisional release of the goods be taking Bank Guarantee for the equivalent differential amount of Custom Duty. He would lastly contend that Section 110A of the Customs Act, 1962 in plain and simple word permits to release provisionally any goods, documents or things seized under Section 110 without any conditions or impediments or restrictions in relation to any category of goods since the Act prevails over any executive instructions etc. In support of his contention learned counsel for the petitioner placed reliance on the law laid down by the Supreme Court in the matter of Delhi Photocopies Vs. Commissioner of Customs (GR. 5) Chennai-II and others {2021 SCC OnLine SC 3535}; Union of India & others Vs. Patiala Castings Private Limited {(2011) 11 SCC 562}; and the judgment of the Delhi High Court in the matter of M/s. Shanus Impex Vs. Union of India & Ors. {WPC No.15729/2023} and would pray for release the goods. 6. Per contra, learned counsel for the respondents would contend that the examination of the container number CMAU4875089 imported vide Bill of Entry number 7810946 dated 13.09.2023 was conducted by Directorate of Revenue Intelligence, Raipur Regional Unit in presence of Independent Panchas, Customs Officials of ICD Naya Raipur and the authorized representative of the Applicant, Mr. Niranjan K Petkar, who was also their CHA, under panchnama 5 proceedings dated 29.09.2023. He would next contend that during the said examination of goods representative samples of each type of goods imported by the applicant were drawn under panchnama proceedings dated 29.09.2023 at ICD Naya Raipur, Raipur. He would next contend that during examination of the goods on 29.09.2023, the LED Lighting Chains/Luminaires appeared to be spurious that is without proper compliance of mandatory norms of BIS under IS:10322 (Part5/Section7):2017, falling under category of compulsory certification. He would next contend that the LED Lighting Chains/Luminaire were not found to be in compliance of the provisions of the Legal Metrology (Packaged Commodity) Rules, 2011. Therefore, for further investigation, the goods were detained and handed the custodian for safe custody under the said panchnama proceedings dated 29.09.2023. 7. He would further contend that the Samples drawn under panchnama proceedings dated 29.09.2023, were sent to Bureau of Indian Standard Office, Naya Raipur for checking the compliance of LED Luminaires (Lighting Chains) falling under compulsory registration scheme under IS 10322 (Part5/Sec 7):2017. He would next contend that the BIS, Raipur vide their letter dated 02.11.2023 and 08.02.2024 submitted their report that Out of the 5 items imported by the Importer, 03 items were found non confirming in marking requirement as per clause 20.6.2, 20.6.3 and 20.6.4 of the IS 10322 6 (Part 5/ Sec 7):2017, 01 items were found without BIS Standard Marks, and CRS BIS view was to taken on 01 Product. He would, therefore, contend that none of the goods Imported by the importer vide Bill of Entry No. 7810946 dated 13.09.2023 were conforming with the BIS Standard. He would next contend that the applicant, M/s Reema Associates, had further filed 2 more Bills of Entry for similar goods i.e. LED Lights vide Bill of Entry no. 8255408 dated 12.10.2023 and 8444049 dated 23.10.2023. Again, the examination of the containers bearing numbers TXGU7327858 and CMAU7657970 imported vide Bill of Entry number 8255408 dated 12.10.2023 and 8444049 dated 23.10.2023, respectively was conducted on 30th& 31 Oct 2023 by the officers of Directorate of Revenue Intelligence, Raipur Regional Unit in presence of Independent panchas, Customs Officials of ICD Naya Raipur and the authorized representative for the Applicant Mr. Kundilal R. Gedam, who is branch manager of their CHA (Bharti Freight Forwarders Pvt. Ltd.) under panchnama proceedings dated 30.10.2023 and 31.10.2023. During examination of the goods, the LED Lighting Chains/Luminaries also appeared spurious as they were without proper compliance of mandatory norms of BIS under IS:10322 (Part5/Section 7): 2017 falling under category of compulsory certification and were not found to be in compliance of the provisions of the Legal Metrology (Packaged Commodity) Rules, 2011. Accordingly, representative samples of each types of goods imported by the Applicant were drawn under panchnama 7 proceedingsdated 31.10.2023 at ICD Naya Raipur, Raipur. Therefore, for further investigation, the goods were also detained and handed over to the custodian for safe custody under the said panchnama proceedings dated 30.10.2023 and 31.10.2023 at ICD Naya Raipur. 8. He would next contend that the samples drawn from above mentioned 2 containers (ie. TXGU7327858 and CMAU7657970) were also sent to Bureau of Indian Standard Office, Naya Raipur for checking the compliance of LED Luminaires (Lighting Chains) falling under compulsory registration scheme under IS 10322 (Part5/Sec 7):2017. He would next contend that the verification report of the two other consignments imported vide Bill of Entry no. 8255408 dated 12.10.2023 and 8444049 dated 23.10.2023 was also received from Bureau of Indian Standards, Naya Raipur vide their ref No. RPBO/LED/01, dated 05.01.2024. While going through the said report submitted by the BIS Raipur Branch Office, it has been found that all the items was found non-conforming in requirement as per clauses 20.6.2, 20.6.3 and 20.6.4 of Marking IS 10322 (Part 5/Sec 7) 2017: except S.No. 02 and 03 of the Bill of Entry No. 8255408 dated 12.10.2023 and item no. 23 of Bill of Entry No. 8444049 dated 23.10.2023. Further S. No. 02 of Bill of Entry No. 8255408 dated 12.10.2023 and S.No. 23 of Bill of Entry No. 8444049 dated 23.10.2023 were found to be without any BIS mark. Further the report also informed that a LED light/luminary imported under BE 8 No. 8255408 dated 12.10.2023 (at Sr. No. 3 of their Annexure containing detailed verification report of BIS Raipur) was with BIS Registration No. R-41158859 and this BIS Registration number was found to be invalid as per BIS Raipur. Accordingly, as per the BIS, Raipur report dated 05.01.2024 all the items imported by the Importer vide Bill of Entry no.8255408 dated 12.10.2023 and 8444049 dated 23.10.2023 were found non-conforming to the requirements of marking as per IS-10322 (Part 5/Sec 7):2017. He would lastly contend that under the circumstances, the instant petition deserves to be dismissed and the petitioner is not entitled for any relief. 9. I have heard learned counsel for the parties and perused the documents. 10. As per amended Paragraph 2.31 of the Foreign Trade Policy 2015- 2020, vide Notification No.5/2015-2020 dated 07.05.2019 import of all electronics and IT Goods notified under the Electronics and IT Goods (Requirement of Compulsory Registration) Order, 2012 as amended from time to time in Sl.No.1(b) to Paragraph 2.31 of the Foreign Trade Policy 2015-2020 was importable against Authorization subject to conditions laid down under "Electronics and Information Technology Goods (Requirement of Compulsory Registration) Order, 2012, as amended from time to time. However, import of unregistered/non-compliant notified products as in CRO, 2012, as amended from time to time were "prohibited". 9 11. Note 2(c) to General Notes regarding Import Policy was amended simultaneously. Policy Condition No.2 under Chapter 84 of Foreign Trade Policy 2015-2020 was inserted. Policy Condition No.5 under Chapter 85 of ITC (HC) 2017 was also amended vide Notification No.5/2015-2020 dated 07.05.2019. Amended vide Notification No.5/2015-2020 dated 07.05.2019 reads as under:- Existing General Note No.2 (C) Amended General Note No.2(C) (C)Import policy for electronics and IT Goods: (C)Import policy for Electronics and IT Goods: The import of Notified Goods under the "Electronics and Information Technology Goods (requirement of Compulsory Registration) Order 2012, as amended from time to time will be allowed subject to registration with the Bureau of Indian Standards (BIS), or on specific exemption letter from Ministry of Electronics and information Technology (MeitY) for a as per particular consignment provisions of Gazette Notification SO 11.09.2013. No.3022 of Accordingly, unregistered/non-compliant notified products as in CRO 2012 as amended as "prohibited" Import consignments without valid registration with BIS shall be re- exported by the importer failing which Customs shall deform the goods and dispose them as scrap under intimation to Meity import dated and repaired The import of Goods (new as well as whether or not second hand, refurbished, or reconditioned) notified under the information "Electronics Technology Goods (Requirement of Compulsory Registration) Order 2012 as amended from time to time is prohibited unless they are registered with the Bureau of Indian Standards (BIS) and comply to the Labelling Requirements published by BIS, as amended from time to time or on specific exemption letter from Ministry of Electronics and Information Technology (Meity) for a as per particular consignment provisions of Gazette Notification SO No.3022 dated 11.09.2013." The importer shall re-export such prohibited Goods reaching Customs Ports else the Customs Authorities shall deform the goods beyond use and dispose of the goods as scrap under intimation to MeitY. Thus, there is prohibition for import under the policy. 10 12. Under the Foreign Trade Policy 2015-2020, that was in force till 19.05.2019, import of second hand Photocopier Machines/Digital Multifunction Print & Copying Machines was prohibited and could be imported only against authorization if it complied with the above requirements. After 19.05.2019, its import is prohibited. 13. Thus, all electronic and IT goods notified under The Electronic and Information Technology Goods (Requirement and Compulsory Registration), Order 2012 became prohibited unless:- i. they are registered with the Bureau of Indian Standards (BIS); and. ii. complied with to the 'Labelling Requirements' published by BIS, as amended from time to time', or: iii. on specific exemption letter from Ministry of Electronics and Information Technology (Meity) for a particular consignment, as per provisions of Gazette Notification SO No. 3022 dated 11.09.2013 14. Imports were permissible only against Authorisation subject to the conditions laid down under the aforesaid order, as amended from time to time. 15. Import without valid registration under Bureau of Indian Standards (BIS) was to be re-exported by the importer, failing which the Customs Department was to deform the goods and dispose them as scrap as an intimation to Ministry of Electronics and Information 11 Technology. 16. An exception was provided to an importer, who obtains a specific exemption letter from Ministry of Electronics and Information Technology (MeitY) for a particular consignment as per provisions of Gazette Notification SO.No.3022 dated 11.09.2013. 17. The expression "Prohibited Goods" is defined in Section 2(33) of the Customs Act, 1962. Section 2 (33) of the Customs Act, 1962 reads as follows;- 2(33) “Prohibited goods” means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported, have been complied with” 18. All Electronic and IT Goods notified under the Electronic and IT Goods (Requirements of Compulsory Registration), 2012 as amended from time to time or Second hand Multi Functional Devices including printers are prohibited and were importable only against authorization subject to the condition laid down in the aforesaid Ministry of Electronics and Information Technology from 19.05.2019. The 12 position under Paragraph 2.13 of the New Policy with effect from 01.04.2023 is not different. Under it, imports are restricted wherever an importer complies with the requirement of All Electronic and IT Goods notified under the Electronic and IT Goods (Requirements of Compulsory Registration), 2012. Imports are prohibited in case of import of unregistered/non-compliant notified products as in CRO, 2012, as, amended from time to time is "prohibited". 19. Paragraph 2.31 to Hand Book of Procedure to the Foreign Trade Policy, 2023 notified on 31.03.2023 reads as under:- Sl. No. Categories of Second Hand Goods Import Policy Conditions, if any I. Second Hand Capital Goods Restricted Importable against Authorisation I(a) i. Desktop Computers; ii.Refurbished/re-conditioned spares of re-furbished parts of personal Computers/Laptops; iii. Air Conditioners; iv. Diesel generating sets I(b) All electronics and IT Goods under the Electronics and IT of Goods Compulsory Registration) Order, 2012 as amended from time to time (Requirements Restricted of (i) Importable against an authorization subject to conditions laid down under Electronics and IG Goods (Requirements Compulsory Registration) Order, 2012 as amended from time to time (ii) unregistered/non- compliant notified products as in CRO, Import of 13 I(c) Refurbished/re-conditioned spares of Capital Goods Free I(d) All other second-hand capital goods [other then (a) (b) & (c) above] Free II. Second Hand Goods other than capital goods Restricted III. Second Hand Goods imported of purpose the for repair/refurbishing/re- conditioning or re-engineering Free 2012 as amended from time to time is “Prohibited” Subject to production of Chartered Engineer certificate to the effect that such spares have at least 80% residual life of original spare Importable against Authorization Subject to condition that waste generated during the repair/refurbishing of imported items is per treated as domestic Laws/Rules/Orders/R egulations/technical specifications/Envior nmental/safety and health norms and the imported item is re- exported back as per Customs the Notification. 20. It has to be kept in mind that Section 11 of the Customs Act, 1962 was amended by the Finance Act, 2018 (Act 13 of 2018). The Finance Act, 2018 (Act 13 of 2018) has been notified with effect from 29.03.2018. However, amendment to Section 11(3) of the Customs Act, 1962 as amended by the Finance Act, 2018 (Act 13 of 2018) has not been given effect to. 14 21. The Supreme Court in the matter of Delhi Photocopies Vs. Commissioner of Customs (GR. 5) Chennai-II and others {2021 SCC OnLine SC 3535} has held thus in para 2 & 3 of the said order which are reproduced hereinbelow:- 2. On July 5, 2021, this Court had issued notice in these matters. Despite the fact that the matter was pending before this Court, the Department went ahead and confiscated the goods which are the subject matter of these petitions on July 17, 2021. Mr. N. Venkataraman, learned ASG, realizing the difficulty in his way, has asked the Department to stay its hands so far as the confiscation is concerned. We see no reason to differ from a number of orders that have been passed by this Court in the past for provisional release of goods. However, it has been pointed out to us that at least on and from April 1, 2020, the goods, according to the Department, are clearly prohibited goods and on and from this date, unless an order is made under Section 125, the goods must stand confiscated. 3. We stay the confiscation of these goods. The Notification dated 01.04.2020 is the subject matter of controversy before this Court, particularly in view of a subsequent Notification dated March 18, 2021 that has been pointed out by Mr. Arvind Datar, learned senior counsel. We, therefore, allow the goods involved in these petitions, to be provisionally released on the same terms that have been indicated in all the other cases. The order dated September 18, 2020 may, in particular, be looked at for this purpose. 22. The Hon’ble Supreme Court in the above matter has ordered the goods to be released under Section 125 of the Custom Act, 1962. 23. Further, Section 110A of the Act, 1962 would be relevant in this case which is reproduced hereinbelow:- 110A Provisional release of goods, documents and things seized pending adjudication: Any goods, documents or things seized under section 110, may, 15 pending the order of the adjudicating authority, be released to the owner on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require. 24. Perusal of the provisions of Section 110A of the Act, 1962 would show that any goods, documents or things seized or bank account provisionally attached under section 110, may, pending the order of the adjudicating authority, be released to the owner or the bank account holder on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require. Therefore, on bare perusal of the Section 110A of the Act, 1962, the adjudicating authority has been granted the discretion to provisionally release the goods, on a bond in a proper format with such security and conditions as the adjudicating authority may require. 25. It is submitted that the petitioner had filed letters dated 8th December 2023 and 11th January 2024 with the Respondents under Section 110A of the Customs Act, 1962 (hereinafter referred to as the Act, 1962) for Provisional release of the goods after taking Bank Guarantees, however, despite that the goods has not been released. 26. Therefore, applying the well settled principles of law in the facts of this case and as per the provisions of Section 110A the goods can be released on certain conditions. Therefore, this court is of the considered opinion that the seized goods can be released in custody of 16 the petitioner after imposing certain conditions because the said goods were not as per the BIS Standard. 27. Accordingly, present petition is allowed. The seized article is directed to be released provisionally in favour of the petitioner within a period of 30 days from the date of receipt of a copy of this order on the following conditions:- (i) Before release of the articles/goods, the documents pertaining to ownership of the said goods be verified and proper Panchnama be made. (ii) The petitioner shall furnish the bank guarantee for differential amount of Custom Duty of Rs.1,24,20,195/- to the respondent. (iii) The petitioner shall keep alive bank guarantees furnished by him in terms of the order of this Court till the order of adjudication as served upon him. (iv) the petitioner shall file an affidavit to the effect that since the goods of the petitioner are not as per the BIS Standard, therefore, he will not sell the aforesaid goods in the Indian market until & unless he do not get the requisite BIS License. (v) When the custom officer required, the petitioner shall produce the said goods on its own expenses.- SD/- SD/- (Arvind Kumar Verma) Judge Ashu