M/S Ram Prasad Traders vs. Commissioner Of Customs

Held

The Court acknowledged the petitioner's contention that the substance should be tested by a laboratory equipped with the necessary technical know-how. However, the Court did not definitively rule on the qualification of the departmental laboratories. Instead, considering the long passage of time since import, the perishable nature of the goods, and accumulating demurrage, the Court ordered provisional clearance. This clearance would be granted upon the petitioner furnishing a bond for the full value of the goods and a bank guarantee for 25% of the differential duty. The Court also noted that it would be open for the petitioner to raise the issue of testing by a qualified laboratory during the adjudication proceedings of the already issued show cause notice.

Facts

The petitioner, M/s Ram Prasad Traders, imported Calcite Powder. The petitioner claimed the substance was in its natural form, while departmental authorities contended, based on reports from Kandla and CRCL laboratory, New Delhi, that it was precipitated Calcite. This distinction could lead to different customs and IGST duties. Consequently, the departmental authorities detained the imported goods, refusing clearance. The petitioner sought provisional clearance, finding the terms offered by the department too onerous. The goods were also reported to be perishable and accumulating demurrage.

Key Issues

1. Whether the departmental laboratories at Kandla and CRCL, New Delhi, are qualified to conduct tests to determine the form of Calcite, given the petitioner's contention that a CBIC circular indicates these laboratories lack sufficiently sophisticated equipment for such tests? Petitioner's argument: The petitioner argued that the CBIC circular explicitly states that the Kandla and CRCL laboratories do not possess the necessary sophisticated equipment to perform the required tests, suggesting alternative institutes. The department, however, did not accept this as a blanket proposition. Revenue's argument: The judgment does not explicitly record the revenue's argument on this specific issue, other than their reliance on the reports from these laboratories to classify the imported substance as precipitated Calcite.