2023 (8) TMI 802 - MADRAS HIGH COURT

Demand of bank guarantee for re-export of the goods - seeking issuance of detention certificate for demurrage and container detention charges in terms of Regulation 6(1)(l) of Handling of Cargo in Customs Areas Regulation, 2009 r/w Regulation 10 (1)(l) of Sea Cargo Manifest Transhipment Regulations, 2018.

Classification of goods - Betelnuts/Areca Nuts - to be classified under Tariff Heading 0802 or under Tariff Heading 2106 9030? - HELD THAT:- If the classification is as contemplated by the Department, then the import of this product with CIF value of less than Rs.251/- per kg is “prohibited” as per Notification 20/2015-2020. The pricing is so fixed in order to protect our farmers. However, it has to be borne in mind that the above referred Notification which forms the basis for the show cause has been stayed by the Karnataka High Court and the same has not been varied or set aside.

The issue of confiscation would arise only if the goods are “prohibited” and the issue of classification is still pending adjudication. Another factor that engages the attention of this Court is the fact that in all the earlier imports the Department had not raised this issue of classification. The records would further show that although in the earlier writ petitions and appeals the petitioners had requested for a provisional release of the goods, after the disposal of the writ appeals the petitioners have requested to re-export the goods. Therefore, the direction to consider the provisional release in terms of Section 110A of the Customs Act now stands converted to the issue as to whether 're-export' can be granted by just receiving a bond.

On reading of the impugned order would show that no reason has been given for imposing the condition for furnishing the bank guarantee. The petitioners have set out in detail in their application the fact that earlier imports of the similar product has not been questioned the Authority has not dealt with this submission.

Since the detention is on the orders of the Department applying the ratio laid in Balaji Dekors Vs. Commissioner of Customs, Commissionerate-III, Chennai [2017 (8) TMI 686 - MADRAS HIGH COURT], detention certificate should be issued to the petitioners - The argument of the Department against its issue is the Central Government Notification No.20/2015-2020 dated 25.07.2018. This notification, as already stated, is stayed by the Karnataka High Court. The 2nd issue is therefore to be answered in favour of the above referred petitioners.

Petitions disposed off.