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TMI Blog2021 (6) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... HARC was incorporated as one of the products in Foreign Manufacturers Certificate Scheme (for short, 'FMCS') under the Bureau of Indian Standards Act, 2016 (for short, 'BIS Act, 2016') and Rules made there under along with Cement (Quality Control) Order, 2003 (for short, 'CQC Order, 2003') as illegal and without jurisdiction. 2. In W.P.No.24863/2020, the petitioner averred that in their ordinary course of business the petitioner imported HARC into India for their business operations. Earlier the respondents have never raised any requirement of compliance with the impugned CQC Order, 2003 qua the refractory cement imported. As usual the petitioner sought to import and clear the consignment of HARC vide Bill of Entry No.9002502 dated 30.09.2020 and 9815345 dated 04.12.2020 for stock and sale purposes. However, the respondent Customs authorities refused clearance of the aforesaid Bills of entry for the reason that the petitioner failed to produce proof of due compliance with the applicable Indian standards for the impugned CQC Order, 2003. Through the letter correspondence, the petitioner explained that the CQC Order, 2003 does not apply to the imported HARC but of no avail. The peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsite wherein the requirement of BIS certification under IS:15895:2018 for import of HARC was incorporated. The petitioners violated the import EXIM policy read with 2(A) of General Notes regarding Import Policy. After the update of the list of items with standards which includes the subject items in BIS website, the petitioners have imported the HARC. Since the BIS have already specified that BIS standards are applicable for import of HARC, in the month of October 2020, the same was insisted by the respondents from the importer as per the CQC Order, 2003. Besides the office of the Principal Commissioner of Customs, Visakhapatnam received a letter from BIS dated 23.10.2020 regarding the applicability of the BIS standard to the HARC and the BIS requested the Department to take necessary action in that regard. (c) It is further contended that the petitioners have incorrectly interpreted the definition of 'cement' found in the CQC Order, 2003. From the said definition, it is clear that the imported goods are nothing but cement of a different grade which is covered under the phrase 'any other variety of cement'. Further, the BIS have specified vide their website in October 2020 that I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , counsel for petitioners, and Sri V.V.N.Narayana Rao, Standing Counsel for 1st respondent, and Sri Suresh Kumar Routhu, Senior Standing Counsel for the respondents 2 to 6, and the learned Additional Solicitor General of India representing the respondents 7 & 8. 7. Severely fulminating the action of the respondent-Customs authorities in insisting the petitioners to produce BIS certificate against the goods imported on the ground that the BIS has notified IS:15895:2018 High Alumina Refractory Cement as one of the items requiring such certificate under the Foreign Manufacturers Certificate Scheme (FMCS), learned senior counsel Sri S.Ravi would argue that HARC is in fact not a cement and it is only a refractory material which has been imported by the petitioners since considerable time to prepare refractories and to sell to the steel and iron industries to use in their furnaces for resistance of high temperature. The raw material used and manufacturing process adopted by the ordinary cement factories and refractory cement factories are quite different and one factory cannot produce the other type of cement. In common parlance and in trade, the High Alumina Refractory material was nev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attain binding force only if the parties stipulate it so in their contract or it was referred to in a legislation or made mandatory by specific orders of the Government. He asserted that since there is no such notification issued by the Central Government, the respondent authorities cannot insist the petitioners to produce BIS certification for the imported goods. He thus prayed to allow the writ petition. 8. Refuting the argument of the petitioners, learned Standing Counsel for the BIS Sri V.V.N.Narayana Rao argued that the goods imported by the petitioners in both the writ petitions would come under the definition 'cement' mentioned in Section 2(d) of the CQC Order, 2003 and therefore, in terms of FMCS, the importer shall obtain BIS certificate from the exporter and produce for customs clearance. Taking us through the definition 'cement' laid down in Section 2(d), learned counsel argued that cement means 'any variety of cement' and therefore, in the broad sweep of the said phrase, HARC is also subsumed in that definition and liable for production of BIS certificate while imported. He took severe objection of petitioners' argument that HARC is only a refractory material but not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bone of contention is the requirement or otherwise of BIS certification to HARC. While it is the contention of the petitioners that indeed HARC is not a cement but a refractory material and as such, it was not notified by the Central Government as cement under the CQC Order, 2003 and so BIS certification is not required, the respondents in turn argued that HARC is very much included in the definition of cement in view of the employment of phrase "any other variety of cement" in the definition of cement and thereby BIS certificate is must. In that view, it is apposite to look into some of the relevant provisions of the BIS Act, 2016, inasmuch as, the CQC Order, 2003 was issued by the Central Government in exercise of the powers conferred by Section 14 of the BIS Act, 1996. Quality control is the method of standardization of quality of various mercantile and consumable goods for the health and safety of the consumable public. Since after the II World War, the World nations have plunged in rebuilding their economies by enhancing the internal and international trade. Hence, quality control became quintessential to meet the qualitative requirements of foreign purchases and to survive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld show that the Bureau may establish, publish, review and promote the Indian standards in relation to the goods, article, process, system or service which shall be notified in the Official Gazette. This notification is only to show that standards are prescribed for certain goods, article, process, system or service, but not for the purpose of compulsorily maintaining such standard in the trade. However, as per Section 13, a manufacturer may apply for grant of license or certificate of conformity for his goods, article, process, system or service so as to use the Standard Mark for his goods or articles and the Director General may grant such license. Then Section 14 says that the Central Government after consulting the Bureau may notify precious metals or other goods or articles as it may consider necessary to be marked with a Hallmark or Standard mark and such goods or articles so notified may be sold through retail outlets certified by the Bureau after they have been assessed for conformity. Section 15 says that no person shall import, distribute, sell, store or exhibit for sale, any goods or article notified under sub-section (1) of Section 14, except under certification of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made mandatory by specific orders of the Government (emphasis supplied). It should be further noted that 1987 Rules were superceded by the BIS Rules, 2017 and later those rules were superceded by the BIS Rules, 2018. Rules 15 & 24 of the BIS Rules, 2017 and 2018 are in pari materia with Rule 7 of the BIS Rules, 1987. 17. So, according to the scheme of the BIS Act and its Rules, the Bureau of Indian Standards is a National Standard Body having technical expertise to establish national standards for goods or articles, process, system or service etc. and it by itself has no power to enforce the implementation. On the other hand, the standards fixed under Section 10 by the Bureau, have to be notified by the Central Government and thereafter, if it considers that the standards established in respect of goods and articles mentioned in Section 14 or Section 16 shall require compulsory conformity, the Central Government shall make a legislation or issue specific order in that regard. With the above jurisprudence the case on hand has to be tested. 18. Both the learned Standing Counsel for the respondents referred the definition of "cement" mentioned in the CQC Order, 2003 to contend tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey are entirely different from cement or material made out of cement. The refractory materials are used in furnaces and kilns to withstand the high temperature, corrosion and abrasion and they are not usable as a substitute of cement for construction activities and vice versa. The Apex Court agreeing with the above arguments, held thus: "The word 'cement' has not been defined in the relevant notification. Therefore it has to be understood in the same way as is understood in common parlance. Cement is exclusively used as a building material and is a commodity of everyday use. Therefore, we have to go only by the popular or commercial meaning of the term. The main property of the refractory is that it can withstand very high temperature, corrosion and abrasion. Cement is used for building roads, bridges and dams etc. and also by common people for building residential or commercial buildings. Anyone buying cement for building purpose would under no circumstance buy refractory. Similarly a mason or a supervisor would under no circumstance use refractory material in making a normal construction. The refractory is used for entirely different purpose namely for furnaces, lining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification was issued in terms of Rule 7(1)(b) of the Bureau of Indian Standards Rules, 1987. As already discussed, under Rule 7(1)(a), the Bureau is obligated to establish Indian standards in relation to any article or process and it can amend, revise or cancel the standards so established. As per Rule 7(1)(b), all standards, their revisions, amendments and cancellations shall be established by notification in the Official Gazette. So, in terms of Rule 7(1)(b), the standard earlier established in the year 2011 for IS:15895:2011 HARC was revised on 09.05.2018 and the same was notified in the Official Gazette by the Central Government. As per Rule 7(7)(b), this establishment of standard is only voluntary to make it available to the public, but its conformity is not mandatory unless it is referred to in a legislation or so pronounced by a specific order of the Government. As rightly contended by the learned senior counsel for the petitioners, the respondents have not produced such a legislation or Gazette notification issued by the Central Government mandating that the standard established by BIS for IS:15895:2018 shall be compulsorily followed. Hence, the notification dated 14.05. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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