MEHAR ENTERPRISES Vs. JOINT COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) RULE. Rule made returnable forthwith and heard the learned counsel for the parties.

(2.) The challenge raised in the present writ petition is to the order dtd. 21/6/2022 passed by the Joint Commissioner, Customs thereby directing confiscation of the goods imported by the petitioner by holding them to be kerosene oil valued at Rs.1,19,96,909.00 under Sec. 111(d) and 111(m) of the Customs Act, 1962 (for short, 'the Act of 1962'). Option has been given to the petitioner to redeem the confiscated goods after paying redemption fine equivalent to the value of the goods. Penalty under Sec. 112(a) has also been imposed for a sum equal to the value of the goods imported. Further penalty under Sec. 114-AA also equivalent to the value of the goods has been imposed.

(3.) Brief facts giving rise to the present challenge are that the petitioner, a Proprietary Concern, is engaged in the import and trading of Petrochemicals as well as Oil products obtained from Bituminous Minerals. The petitioner holds requisite permissions and has been duly registered as required. Pursuant to Invoice dtd. 23/8/2021 the petitioner imported Mixed Mineral Hydrocarbon Oil from Kuwait. The description of the goods is "Mixed Mineral Hydrocarbon Oil" HS-Code 27101990. A Bill of Entry dtd. 11/9/2021 was accordingly filed by the petitioner at ICD Borkhedi, Nagpur. In the packing list it was stated that six containers of Mixed Mineral Hydrocarbon Oil under CTH 2710 had been imported. The Officers of the Directorate of Revenue Intelligence drew samples of the imported material from each container and the samples were sent to the Central Excise and Customs Laboratory, Vadodara - the Vadodara Laboratory on 16/9/2021. The laboratory report dtd. 23/9/2021 was accordingly received in which it was stated that the samples met the requirements of kerosene as per IS 1459-1974. According to the petitioner all requisite tests that are required to be conducted as well as the tests as directed by the Officers of the Directorate of Revenue Intelligence had not been conducted at the Vadodara Laboratory. On the basis of the aforesaid report the Officers of the Customs Department had a reasonable belief that the imported goods were liable for confiscation under Sec. 111 of the Act of 1962. Since the petitioner was of the view that what was imported was Mixed Mineral Hydrocarbon Oil, it made a request for re-testing of the samples. However, without undertaking such re-testing, show cause notice dtd. 22/3/2022 came to be issued under Sec. 124 of the Act of 1962. The petitioner was called upon to show cause on the basis of the Test Memo received from the Vadodara Laboratory as to why the seized goods which were 104650 Kilograms of kerosene oil should not be confiscated under Sec. 111(d) and 111(m) of the Act of 1962 followed by imposition of penalty. The petitioner replied to the said show cause notice and stated that the tests conducted at the Vadodara Laboratory were not undertaken by following the prescribed norms. It was asserted that the goods imported were in fact Mixed Mineral Hydrocarbon Oil and it was prayed that the show cause notice be dropped. Another request for re-testing of the samples was made vide communication dtd. 22/4/2022. The Joint Commissioner after considering the material before him held that as per the report of the Vadodara Laboratory the goods imported were found to kerosene oil as per IS..1459-1974. Since the petitioner was not a State Trading Enterprise that could import kerosene oil there was violation of the provisions of the Act of 1962. On that premise the goods were liable to be confiscated under Sec. 111(d) and 111(m) of the Act of 1962. The show cause notice was accordingly adjudicated by the order dtd. 21/6/2022. It is this order that is subjected to challenge in this writ petition.