Optimist Impex LLP Vs Union of India (Gujarat High Court)
Summary: The Gujarat High Court disposed of two writ petitions filed by Optimist Impex LLP concerning non-clearance of imported roasted areca nuts and conditions imposed for provisional release. In Special Civil Application No.1254 of 2025, the petitioner sought assessment of Bill of Entry No.6003698 dated 07.10.2024 and clearance of roasted areca nuts for home consumption. The connected Special Civil Application No.3351 of 2025 concerned Bill of Entry No.126006 dated 27.12.2024. The petitioners also challenged the Customs authorities’ letter dated 13.02.2025 requiring a provisional bond and a bank guarantee equivalent to 25% of the differential duty. The dispute arose over classification of roasted areca nuts under Customs Tariff Heading 2008 19 20 of Chapter 20, as claimed by the petitioners, or Heading 080280 of Chapter 8, as insisted upon by the authorities for levy of Basic Customs Duty.
The petitioners submitted that an advance ruling dated 24.07.2024 had classified roasted areca nuts under CTH 2008 19 20, relying upon the Madras High Court’s decision in Commissioner of Customs, Chennai v. Shahnaz Commodities International Private Limited, 2023 (386) ELT 214. They relied upon a CRCL report dated 21.11.2024, which identified characteristics of areca nuts but could not complete certain food-safety and metal-contaminant tests, a Plant Protection Officer’s quarantine clearance dated 28.11.2024, and analysis by an NABL-accredited laboratory under the food-safety framework. They argued that the demand for a 25% bank guarantee was onerous and offered deposits of ₹1,00,000 and ₹1,50,000 respectively, together with provisional bonds for the full imported value. The Customs authorities maintained that examination was continuing and final assessment would follow receipt of the requested reply and evidence.
Without adjudicating the competing tariff classifications or the merits of the dispute, the High Court directed the petitioners to deposit ₹1,00,000 and ₹1,50,000 respectively within three days. The respondents were directed to issue provisional release orders within three days after deposit and complete final assessment of the Bills of Entry as early as possible after receiving the petitioners’ reply and evidence under the letter dated 13.02.2025. Both petitions were disposed of, notices were discharged and direct service was permitted.
Cases Discussed
- Commissioner of Customs, Chennai v. Shahnaz Commodities International Private Limited — 2023 (386) ELT 214 (Madras High Court). Relied upon by the petitioners in connection with classification of roasted areca nuts under CTH 2008 19 20.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Heard learned advocate Mr. Hardik Modh for the petitioners and learned advocate Mr. C.B. Gupta for the respondents.
2. Notice returnable forthwith in Special Civil Application No.3351 of 2025. Learned advocate Mr. C.B. Gupta waives service of notice on behalf of the respondents.
3. Facts are identical in both the petitions and therefore, for the sake of convenience, facts are recorded from Special Civil Application No.1254 of 2025.
4. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for a direction to the respondents to assess the Bill of Entry No.6003698 dated 07.10.2024 by allowing the Roasted Areca Nuts imported by the petitioner by the said Bill of Entry for clearance of goods for home consumption. The petitioner has also prayed for quashing and setting aside the letter dated 13.02.2025 issued during the pendency of this petition for provisional release of the goods imported by the petitioner on condition to submit provisional bond and Bank Guarantee of 25% of differential duty.
5. Learned advocate Mr. Modh submitted that the petitioner had preferred an application for Advance Ruling before the Customs Authorities under section 28H(1) of the Customs Act, 1962 for classification of “Roasted Areca Nuts Whole and Roasted Areca Nuts Tukda/Split/Farcha” as the petitioner had doubt whether the Roasted Areca Nuts would fall under Chapter 8, Chapter 20 or Chapter 21 of the Customs Tariff Act.
6. It was submitted that the Customs Authorities for Advance Ruling by order dated 24.07.2024 examined the issue of classification of Roasted Areca Nuts and held that the Roasted Areca Nuts merit classification under CTH 2008 19 20 of Chapter 20 of the First Schedule of the Customs Tariff Act, 1975 in view of the decision of Hon’ble Madras High Court in case of Commissioner of Customs, Chennai v. Shahnaz Commodities International Private Limited reported in 2023 (386) ELT 214.
7. It was further submitted that after filing the Bill of Entry for import of Roasted Areca Nuts Split classifying it under Chapter Heading No. 2008 19 20 on 07.10.2024, the respondent authority did not permit the clearance and sent the samples to Central Revenue Control Laboratory(CRCL), New Delhi for examination.
8. It was submitted that CRCL by report dated 21.11.2024 examined the samples and issued the Test Report stating that based on the parameters and appearance, the sample has the characteristics of Areca Nuts. It was further stated that whether the goods were fit for human consumption could not be ascertained since the parameters of TPC,Y&M, S. aureus, Enterobacteriaceae were not done due to sample not being received in sterile bags and Metal contaminants of the sample could not be done due to instrument breakdown.
9. It was further pointed out that the Plant Protection Officer also examined the consignment imported under the said Bill of Entry on 28.11.2024 and certified that the imported consignments accorded quarantine clearance/provisional quarantine clearance for growing in an approved post entry/Quarantine facility as per the provisions of Clause 3(1B) of the Plant Quarantine (Regulation of Import into India) Order, 2003 issued under section 3(1) of the Destructive Insects and Pests Act, 1914.
10. It was further pointed out that the Food Safety and Standard Authority of India(FASSI) examined the samples through NABL Accredited Laboratory and came to the conclusion that the result of analysis shows that the samples confirm the specifications prescribed under Food Safety and Standard Act, 2006 and Regulations made thereunder after examining the parameters which were not examined by CRCL.
11. It was pointed out that the respondent authorities however did not assess the Bill of Entry and allowed the clearance of goods for home consumption inspite of various requests made by the petitioner from time to time.
12. Being aggrieved by such action of the respondents, the petitioner has preferred Special Civil Application No.1254 of 2025.
13. Insofar as Special Civil Application No.3351 of 2025 is concerned, the petitioner has prayed for a direction to assess the Bill of Entry No.126006 dated 27.12.2024 wherein in similar facts, the Bill of Entry filed by the petitioner is not cleared by the respondents on the same ground.
14 . It was pointed out by learned advocate Mr. Modh that during the pendency of these petitions, the respondents by letter dated 13.02.2025 considered the request of the petitioners for provisional release of the goods in question and asked the petitioners to submit provisional bond and Bank Guarantee of 25% of the differential duty for provisional release.
15. Learned advocate Mr. Modh therefore, submitted that the respondents are insisting upon the classification of the goods in question under Customs Tariff Heading No. 080280 so as to levy the Basic Customs Duty (BCD) which otherwise is exempt if the goods in question are classified under Chapter Heading No. 2008 19 20.
16. Per contra, learned advocate Mr. C.B. Gupta for the respondents referred to and relied upon the affidavit in reply filed on behalf of the respondents contending inter-alia that the respondents are in the process of examining the goods in question and the petitioners may furnish Bank Guarantee of 25% of the differential duty for the provisional release and after receipt of reply and evidence from the petitioners as required as per letter dated 13.02.2025, the respondents shall finally assess the Bills of Entry.
17. Learned advocate Mr. Modh submitted that the petitioners are ready and willing to submit the reply and evidence as per letter dated 13.02.2025 however, the condition imposed by the respondents to submit Bank Guarantee of 25% of the differential value is very onerous in view of report of CRCL and FASSI.
18. It was therefore, submitted by learned advocate Mr. Modh that the petitioner of Special Civil Application No.1254 of 2025 is ready and willing to deposit Rs. 1,00,000/- being 15% of 30% of Basic Customs Duty and 10% of SWS on BCD on the declared value of imported goods and the petitioner of Special Civil Application No.3351 of 2025 is ready and willing to deposit Rs. 1,50,000/- being 15% of 30% of Basic Customs Duty and 10% of SWS on BCD on the declared value of imported goods.
19. It was further submitted that the petitioners shall also submit provisional bond for the entire value of the imported goods subject to the final assessment to be made by the respondents.
20. It was also prayed that the respondents may be directed to clear the imported goods in future on similar condition on provisional basis.
21. Considering the submissions made by learned advocates for the respective parties and without entering into the merits of the matter, these petitions are disposed of by issuing the following directions in the interest of justice:
i) The petitioner of Special Civil Application No. 1254 of 2025 shall deposit Rs. 1,00,000/- being 15% of 30% Basic Customs Duty and 10% SWS on BCD on declared value of the goods imported.
ii) The petitioner of Special Civil Application No. 3351 of 2025 shall deposit Rs. 1,50,000/- being 15% of 30% Basic Customs Duty and 10% SWS on BCD on declared value of the goods imported.
iii) The aforesaid amount shall be deposited within a period of three days from today.
iv) The respondents shall pass provisional release order of the goods imported by the petitioners within a period of three days from the date of deposit.
v) The respondents shall pass the final assessment order on Bills of Entry after receipt of reply and evidence of the petitioners as per letter dated 13.02.2025 as early as possible.
22. With the aforesaid directions, the petitions are disposed of. Notice is discharged in the respective petitions.
Direct service is permitted.
