In a key decision, the Supreme Court today overturned the confiscation of imported goods labelled as "Base Oil SN 50," which customs authorities had classified as High-Speed Diesel (HSD), which only the State entities can import.
The Court found that the Customs Department failed to provide conclusive evidence proving the goods were High-Speed Diesel (HSD), due to inadequate laboratory testing and conflicting expert opinions.
In this regard, the bench comprising Justices BV Nagarathna and N Kotiswar Singh criticized inadequate lab testing facilities, which led to the release of confiscated goods because the customs authorities tested only 8–14 out of 21 IS 1460:2005 (HSD) parameters—insufficient to classify the goods as HSD.
Therefore, the Court directed the Respondents to upgrade lab facilities within six months to ensure full IS-standard testing and prevent future disputes.
"The genesis of the prolonged litigation lies in the non- availability of adequate facilities for testing all the parameters provided under Bureau of Indian Standard Specifications. Such a dispute could have been avoided had the testing facilities for all the parameters been available.
Since the Authorities themselves had laid down the specific parameters for classification of goods, as in the present case by referring to classification under IS 1460:2005, it is incumbent upon the Authorities to ensure that necessary facilities are made available for testing of any disputed article on all these parameters as otherwise, laying down such parameters would be meaningless.
“Hence, to avoid these difficulties, doubts and uncertainties in future, the respondents are directed to ensure that proper facilities are made available in the appropriate laboratories for undertaking tests for all these parameters or at least for those parameters which the Authorities consider are of essential character to satisfy the “most akin” test without which the article in issue cannot be properly classified. Accordingly, we direct the respondents to take necessary steps in this regard within a period of six months for proper testing in all the parameters in future.”,
