R. Krishnaprasad vs. The Commissioner Of Customs
Original PDF →Facts
The petitioner, R. Krishnaprasad, proprietor of Karthika Traders, imports Technical Grade Urea. He imported 300 metric tons of urea from Dubai. During the Bill of Entry processing, samples were sent for testing at the Central Revenues Control Laboratory (CRCL). The CRCL report indicated a Biuret content of 1.02%, which did not meet the requirements for technical urea as per IS 1781:1975. The petitioner sought a writ of mandamus to clear the goods as Technical Grade Urea under tariff item 31021090. The respondents contended that the Biuret content exceeded the permissible limit of 0.8% for Technical Grade Urea, classifying it under tariff item 31021010, which has import restrictions.
Held
The Court held that the question of whether the imported product is Technical Grade Urea or Fertilizer Grade Urea is a question of fact. This factual determination must be based on the parameters established by the Laboratory's examination of the samples. The High Court lacks the expertise to determine the correctness of the Chemical Examiner's report. Therefore, this issue must be decided by the relevant authorities. Consequently, the Court found the writ petition to be not maintainable. No specific operative directions were issued, as the petition was dismissed on grounds of maintainability.
Key Issues
1. Whether the imported urea, with a Biuret content of 1.02%, can be classified as Technical Grade Urea under tariff item 31021090 of the Customs Tariff Act, 1975, or if it falls under tariff item 31021010 due to the Biuret content exceeding the prescribed limit of 0.8% as per IS 1781:1975. Petitioner's arguments: The Biuret test is not the sole determinant for differentiating Technical Grade Urea from Fertilizer Grade Urea. The Customs House Laboratory did not apply the correct test, and its report is unreliable. The Chemical Examiner's role is to provide composition, not classification. Discrepancies between the Customs House Laboratory report and a report from the Fertilizers Control Laboratory should lead to the goods being cleared as declared. Revenue's arguments: The Biuret content of 1.02% exceeds the maximum permissible limit of 0.8% for Technical Grade Urea as per IS 1781:1975. Fertilizer Grade Urea has a maximum Biuret content of 1.5% as per IS 5406-1979. Higher biuret content makes the product unsuitable for technical grade and potentially toxic for cattle feed, necessitating classification under tariff item 31021010, which is restricted for import. The Chemical Examiner's report is reliable and should not be doubted.
Sections Cited
Customs Tariff Act, 1975, IS 1781:1975, IS 5406-1979
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
J U D G M E N T
The petitioner is in the business of general stores, trading (wholesale/distribution) in cattle feed, paper and wood products through his proprietary concern, ‘Karthika Traders’. It is also said that the petitioner deals in ‘Technical Grade Urea’ falling under tariff item 31021090 of the First Schedule to the Customs Tariff Act, 1975 aligned to HSN Code:31021090. 2. The petitioner supplies Technical Grade Urea to Kerala Co-operative Milk Marketing Federation Limited and Karnataka Milk Federation, which are the ventures of the Governments of Kerala and Karnataka, respectively. It is further said that the petitioner also supplies Technical Grade Urea to Kerala Feeds Limited, a public sector undertaking of the Government of Kerala engaged in manufacturing cattle feed and supplements. According to the petitioner, the -3-
petitioner had imported 300 metric tons of urea from Dubai, UAE. While processing the Bill of Entry, the samples of manual test of the urea imported by the petitioner were sent for examination at the Central Revenues Control Laboratory. The test report has been placed on record as Ext.P5, showing that the Biuret content (per cent by mass) present in the samples collected from the imported urea by the petitioner is 1.02%. It is also said that the Biuret content obtained for the sample does not match the requirements for technical urea as per IS 1781: 1975, RA 2021 – Urea, Technical – Specifications.
1 However, the petitioner has approached this Court for a writ of mandamus to command the respondents to forthwith complete all procedures and formalities and clear the goods imported by the Bill of Entry in Ext.P4 as Technical Grade Urea.
Sri Aswin Gopakumar, learned Counsel for the -4-
petitioner has submitted that based on the laboratory report of the samples, now the respondents are taking the stand that the imported goods cannot be classified under tariff item 31021090 of the First Schedule to the Customs Tariff Act as declared in the Bill of Entry and is liable to be classified under tariff item 31021010 of the said schedule of the Tariff Act. As per the Foreign Trade Policy 2023 and Notification No.08/2023 dated 29.05.2023 issued by the Director General of Foreign Trade, the import of urea falling under the tariff item 31021010 is allowed only through the Rashtriya Chemicals and Fertilizers Limited, National Fertilizers Limited, Indian Potash Limited, State Trading Enterprises etc.
1 Learned Counsel for the petitioner further submits that the goods imported by the petitioner would fall under tariff item 31021090 and not under tariff item 31021010, which are aligned with HSN Code 31021090 and 31021010, -5-
respectively. It is also submitted that the Biuret test is not the only determinant factor for differentiating Technical Grade Urea from Fertilizer Grade Urea. Furthermore, the Customs House Laboratory has not applied the correct test for determining whether the goods imported by the petitioner are technical grade or fertilizer grade urea.
2 It is also stated that the Chemical Examiner can only give a composition of goods and not comment on the classification of goods. Here, the laboratory report would disclose that the Chemical Examiner has classified the goods as not technical grade urea. Two samples were drawn from the same lot that gave different results by the Fertilizers Control Laboratory, a professional laboratory, and the Custom House Laboratory. The test reports are at variance at both Laboratories, and therefore, they should be ignored, and the goods should be cleared by Ext.P4 Bill of Entry as Technical -6-
Grade Urea.
Sri P G Jayashankar, learned Senior Standing Counsel for the respondents, has submitted that the Bills of Entry were first assessed by the System and an examination order was given. As per the petitioner/importer’s request to reassess the Bill of Entry for changing the declared rate of IGST to Sl. No.42 of Schedule III of Notification No.1/2017, the Bill of Entry was reassessed with the approval of the competent authority and an examination order was given. As per the Foreign Trade Policy, the import of fertilizer-grade urea is restricted only to State-owned enterprises.
The representative samples of the goods imported were drawn by the Shed Officer and sent to CRCL Lab, Custom House, Cochin for testing. As per the test report, the Biuret content present in the samples was higher than the maximum Biuret content prescribed for the Technical Grade Urea, which is 0.8%.
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1 Learned Senior Standing Counsel for the respondents has placed reliance on the Indian Standard Specification for Urea, Technical, IS: 1791 – 1975, which provides that Biuret, per cent by mass, maximum, should be
He submits that if the Biuret content present is above the maximum content prescribed for Technical Grade Urea, the same cannot be classified as Technical Grade Urea. In respect of the Fertilizer Grade Urea, as prescribed under Indian Standard IS: 5406 -1979, the Biuret, per cent by mass, maximum, prescribed is 1.5 as per 6 of IS: 6092. 4.2 Furthermore, the learned Senior Standing Counsel has relied on some technical material obtained through the Internet Wikipedia on Biuret and submitted that it is a chemical compound with the chemical formula HN(CONH2)
Biuret is a common undesirable impurity in urea-based fertilizers, as biuret is toxic to plants. Biuret is also used as a -8-
non-protein nitrogen source in ruminant feed where it is converted into protein by gut microorganisms. It slows down its digestion. The Biuret test is a chemical test for proteins and polypeptides.
3 Learned Senior Standing Counsel for the respondent has also submitted that there is nothing to doubt the report of the Chemical Examiner. Considering the grave and serious consequence of more biuret in the urea per cent, which could be used for cattle feed, the said product cannot be classified as Technical Grade Urea. He submits that the issue is of classification and this Court should not interfere with the Chemical Examiner’s report, in which the Biuret content has been found to be 1.02%.
Whether the petitioner’s product is Technical Grade Urea, or the Fertilizer Grade Urea is a question of fact which can be determined on the basis of the relevant parameters as -9-
determined by the Laboratory on examination of the samples drawn from the imported goods. This Court absolutely has no expertise to hold that the Chemical Examiner’s report is incorrect. This question has to be decided by the authorities themselves. Therefore, I find this writ petition is not maintainable, which is hereby dismissed. DINESH KUMAR SINGH JUDGE
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Appendix — schedule of exhibits
Reproduced from the public record of the Kerala High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.