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Dated: 26.05.2025

CESTAT Delhi- Import of MEK-Based Ink Does Not Require Narcotics NOC

The Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, allowed the appeal of M/s Videojet Technologies (India) Pvt. Ltd., holding that the import of ink and ink consumables containing Methyl Ethyl Ketone (MEK) does not require a No Objection Certificate (NOC) under the NDPS Act, 1985. The Tribunal set aside the confiscation, reclassification, and penalties imposed by Customs under Sections 111(d), 112, and 114AA of the Customs Act, 1962.

Background of the Case

• Importer: M/s Videojet Technologies (I) Pvt. Ltd.
• Goods Imported: Ink and ink-related consumables containing MEK (35% to 99%)
• Customs Action:
  • Goods seized by the Preventive Commissionerate, New Delhi
  • Reclassified from Chapter 32 (inks) to CTI 29141200 (MEK)
  • Confiscation ordered under Section 111(d)
  • Penalties of ₹10 lakhs under Section 112 and ₹25 lakhs under Section 114AA

Key Department Allegations

• MEK is a controlled substance under the NDPS Act and import requires prior NOC from the Narcotics Commissioner.
• The imported ink products were predominantly composed of MEK and thus required regulatory clearance.
• The importer misdeclared the nature of the goods and violated the NDPS (Regulation of Controlled Substances) Order, 2013.

Appellant’s Key Arguments

• The goods are finished ink products, not raw MEK, and were correctly classified under Chapter 32.
• As per Clause 11 and Schedule C of the RCS Order, only MEK itself, not preparations containing MEK, require an NOC.
• The importer had made full and prior disclosure to the Narcotics Commissioner in 2015–2017, including filing representations and a writ petition in the Bombay High Court.
• There was no concealment, misdeclaration, or use of false documents.

CESTAT’s Legal Observations

1. Classification Reversal Not Justified
   • The Tribunal held that while the inks contained a high percentage of MEK, they were marketed, declared, and sold as inks, not as MEK.
   • Citing the General Rules for Interpretation, classification must reflect the essential character—which in this case is that of ink, not MEK.
2. NOC Not Required for Preparations
   • The Tribunal referred to Schedule C of the RCS Order, which explicitly includes MEK, but not its preparations or derivatives.
   • Observed that other controlled substances in the Schedule mention “salts” and “preparations” when those are meant to be covered.
   • Concluded that only MEK per se requires NOC, not products that merely contain it.
3. Narcotics Commissioner’s Interpretation Not Binding as Law
   • The Narcotics Commissioner’s internal order cannot override statutory language and is not “law in force” under Section 111(d).
4. Penalty Under Section 112 Not Sustainable
   • Since no violation of law was established, confiscation under Section 111(d) was unwarranted, making the connected penalty under Section 112 untenable.
5. Section 114AA Penalty Also Unjustified
   • No false or misleading declaration was made.
   • The importer transparently declared MEK content and sought clarification well in advance of import.

Final Verdict by CESTAT Delhi

• Confiscation under Section 111(d) – Set Aside
• Classification Reverted to Chapter 32 (inks)
• Penalty under Section 112 – Quashed
• Penalty under Section 114AA – Quashed
• Appeal Allowed with Consequential Relief

Legal Significance

This judgment reinforces critical principles in customs and regulatory law:

• Trade substances must be classified based on essential character, not chemical composition alone.
• Regulatory overreach must be checked—departments cannot expand the scope of statutory controls without express legal backing.
• Transparency by importers must be rewarded, not penalized, especially when full disclosure is made and pre-import clarification is sought.

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Source: CESTAT Delhi

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