By TIOL News Service

MUMBAI, DEC 27, 2016: THE appellant filed Bill of Entry for clearance of Boric Acid. The department contended that as per Circular No. 61/2004 dated 28.10.2004 issued by CBE&C the goods namely, Boric Acid is to be treated as insecticide and to be classified under CTH 38081099. As per the said circular, the import of boric acid can be allowed only on production of a certificate of registration from Central Insecticide Board or a certificate of end use from the Ministry concerned.

However, since the appellant had not produced the aforesaid certificate, the goods were confiscated and an option to redeem the same was given on payment of fine of Rs.2 lakhs and a penalty of Rs.15,000/- was imposed.

As their appeal was rejected by Commissioner (Appeals), the importer is before the CESTAT.

The appellant submitted that the goods imported by them namely, boric acid is specifically covered under CTH 2810 and is freely importable. Furthermore, it is submitted that the goods were shipped much before the date of the Circular No. 61/2004; that as per the ITC (HS) to Export Import Policy prevailing at the time of import, the boric acid was clearly mentioned under CTH 2810 and was freely importable and there was no condition of requirement of certificate under Insecticide Act; that the condition of import permit issued by the Central Insecticide Board & Registration Committee was brought under the ITC (HS) only w.e.f. 7.4.2006 whereas the import of the appellant is on 27.12.2014; that an identical issue has been decided by the Tribunal in Hardware Trading Corporation - 2006-TIOL-284-CESTAT-MUM.

The AR reiterated the findings of the impugned order and also informed that the judgment cited by the appellant in the case of Hardware Trading Corporation is appealed before the Bombay High Court and has been admitted as Customs Appeal No. 35 of 2006.

The Bench extracted the findings of the Tribunal in the case of Hardware Trading Corporation and further observed -

"5.2 It is seen that on 8.11.2004, the meeting of the Registration Committee was held on the KrishiBhawan in chairmanship of Agricultural Commissioner. In the said meeting, after deliberation following recommendations were made:-

"(i) 17 applications are for import of boric acid for non-insecticidal use. These are exempted from the requirement of registration under the Insecticides Act,1968. They may be informed accordingly to follow the guidelines as suggested by the Department of Agriculture & Cooperation.

(ii) 10 applications which need clarification. For these, clarification may be sought from the applicants. After the receipt of the same, the applications may be put up to the Registration Committee.

(iii) 3 applications are for indigenous manufacture for non-insecticidal use. These are also exempted from the requirement of registration under the Insecticides Act, 1968. They may be informed accordingly to follow the guidelines as suggested by the Department of Agriculture & Cooperation.

(iv) 2 applications which are for indigenous manufacture for insecticidal use and 5 applications which are for import for insecticidal use may be scrutinized as per the guidelines of the Registration Committee and put up to the Committee.

(v) Department of Agriculture & Cooperation may be informed the status of applications of boric acid accordingly with the request to provide the importers and indigenous manufacturers the guidelines for import/indigenous manufacture of boric acid for non-insecticidal use."

From the findings of the said committee, it can be seen that the concerned Ministry is of the opinion that if boric acid is used for non-insecticidal purpose, no registration is required under the Insecticide Act, 1968. In other case, however, it may necessary to obtain registration."

The Bench, therefore, held -

++ It is apparent that the boric acid would be classifiable under Chapter 28 and registration is required in cases where the use is for insecticidal purpose. In the instant case, the imports have been made by the Traders and it is not clear that the boric acid imported have been used for insecticidal purpose. In such circumstances, importation of boric acid may not require registration from the concerned authorities under the Insecticide Act, 1968.

++ We find that no evidence has been placed on record to establish that the material has been used for insecticidal purposes and therefore it cannot be said that registration under Insecticide Act is needed.

++ Under these circumstances, we hold that confiscation and penalty cannot be sustained.

The Appeal was allowed.

(See 2016-TIOL-3330-CESTAT-MUM)