By TIOL News Service

CHENNAI, JUNE 27, 2017: WHILE dismissing the appeal of the importer, the CESTAT - 2016-TIOL-531-CESTAT-MAD had inter alia held thus –

Customs - Import of insecticide intended for non-insecticidal purposes - Held import permit/registration must be mandatorily obtained from Registration Committee under Department of Agriculture and Co-operation in compliance with DGFT Notification No. 106/2013/2009-2014 dated 1.1.2015.

The appellant contends that bronopol is imported for non-insecticidal purpose. However, it is found that the appellant is not a manufacturer or actual user or industry but only a merchant trader and there is no evidence to show that said Bronopol insecticide is used for non-insecticidal purpose. Further, as per the DGFT Notification No. 106/2013/2009-2014 dated 1.1.2015, if any insecticide is imported even for non-insecticides purpose, the permission is necessary from the Registration Committee under Department of Agriculture and Co-operation. The notification is issued under section 3 of Foreign Trade (Development & Regulation) Act, 1992 read with Foreign Trade Policy 2009 - 2014 which has come into effect from 1.1.2015. Once the DGFT notification stipulates condition of permit for committee, the appellants should have obtained necessary permission from the committee even if it is for non-insecticidal purpose. Therefore, the customs and the importer are bound by this notification issued by DGFT. There is neither any assessment of the Bill of Entry completed nor any order was passed by customs invoking any contraventions of Customs Act, nor the goods were confiscated, or any fine and penalties imposed, the adjudicating authority was right requiring the appellant to produce the necessary permission to assess bill of entry for the release of goods in question. Consequently impugned order upheld and the appeal is dismissed. (Para 5, 6)

The appellant is before the Madras High Court.

It is submitted that vide their letter dated 09.05.2015 the appellant informed that Bronopol is used as non-insecticidal and so the subject goods are exempted from the Insecticides Act, 1968, in terms of Section 38(1)(b) of the said Act.

The High Court, after considering the submissions made by both sides extracted section 38 of the Insecticides Act, the DGFT Notification dated 01.01.2015 and observed –

++ The contention of the appellant that the notification issued under Section 5 of the Foreign Trade Act, is a mere executive instruction and so the said notification would not apply to the appellant company cannot be accepted. In the light of the decision … rendered by the Division Bench of the Kerala High Court [in Union of India vs. Maliakkal Industrial Enterprises ], it has been held that the aforesaid notification issued by the Director General of Foreign Trade is a law and not an executive instruction and the import and export is governed under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992.

Adverting to Section 2 of the Insecticides Act, 1968 titled 'Application of other laws not barred' , the High Court further observed –

+ Imports are governed by other Acts also and the contention of the appellant that Insecticides Act alone is applicable, is not correct.

+ The appellant merely submitting a declaration of the end use that the Bronopol will be used for non-insecticidal purpose is not sufficient and, therefore, exemption under Section 38(1)(b) of the Insecticides Act cannot be applied automatically , to the appellant. The appellant has failed to produce evidence before the authority to establish that the Bronopol will be used for non-insecticidal purpose. In the absence of such evidence, it cannot be construed that the said Bronopol will be used only for non-insecticidal purpose.

+ The notification dated 01.01.2015 issued by the Director General of Foreign Trade clearly states that as per the policy decision even if the import is for non-insecticidal use, permission is necessary from the Registration Committee under the Department of Agriculture and Co-operation and that import cannot be allowed in the absence of the said permit. Hence, the Tribunal has rightly concluded that the appellant company is not entitled to the benefit of Section 38(1)(b) of the Insecticides Act, 1968 and the requirement of getting permission from the Registration Committee under the Department of Agriculture and Co-operation, as per the aforesaid notification has to be complied with , in order to prevent illegal imports of insecticides, under the guise of non-insecticidal use.

Holding that the High Court is not inclined to interfere with the final order passed by the Tribunal, the substantial question of law was answered against the appellant company.

The Civil Miscellaneous Appeal was dismissed.

(See 2017-TIOL-1193-HC-MAD-CUS)