The Supreme Court has directed the Union government to significantly upgrade the testing infrastructure and laboratory capabilities, emphasizing the critical need for comprehensive and accurate test results in legal cases involving the confiscation and penalties of imported goods. The directive was issued by a bench consisting of Justices BV Nagarathna and N Kotiswar Singh, in a decision that highlights the judiciary’s concern over the current inadequacies in laboratory testing across the country.
The ruling, dated March 28, came after the court observed that three leading laboratories failed to conclusively determine the nature of an imported oil consignment—whether it was High-Speed Diesel (HSD) or Base Oil. HSD imports are heavily regulated in India, permitted only by state trading enterprises, which added complexity to the case involving three importers whose shipments were seized under suspicion of misclassification.
The court’s decision to close the customs proceedings against the importers—M/s Gastrade International, M/s Rajkamal Industrial Pvt Ltd, and M/s Divinity Impex—was based on the benefit of doubt due to inconclusive laboratory results. The importers’ consignments, declared as “Base Oil SN 50” from UAE, had been seized by the Directorate of Revenue Intelligence (DRI) at Gujarat’s Kandla Port in 2019.
Despite testing by the Central Excise and Customs Laboratory in Vadodara, Central Revenues Control Laboratory (CRCL) in New Delhi, and the Indian Oil Corporation Ltd. (IOCL) in Mumbai, no definitive conclusion was reached on the nature of the oil. Each laboratory provided varying degrees of conformity with HSD, yet none could definitively classify the sample as HSD or Base Oil.
Highlighting the importance of reliable and precise laboratory assessments in legal and regulatory frameworks, the Supreme Court criticized the existing facilities for their inability to perform comprehensive testing. “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,” the court noted.
To address this systemic issue, the court has given the government a six-month deadline to implement necessary upgrades to ensure that laboratory testing can meet all required parameters for the classification of substances like HSD. This move is intended to prevent similar disputes in the future, facilitating smoother legal and customs procedures.
