2002 (6) TMI 475 - AT - Customs

Re-export of contravening goods imported after obtaining clarification from DGFT - Confiscation and penalty

Summary

Issues:
1. Classification of goods imported - Cordless Phones.
2. Confiscation of goods and imposition of penalty under Section 111(d) of the Customs Act.
3. Interpretation of Import-Export Policy and DGFT clarification.
4. Restrictions on the use of cordless phones by the Ministry of Communications.

Classification of Goods Imported - Cordless Phones:
The Appellant, a recognized Trading House engaged in exporting rice and agro commodities, imported 100 pieces of cordless phones from China for self-use within group companies. The Additional Commissioner confiscated the goods, stating that the phones operated on a frequency and range not permitted in the country, classifying them as prohibited goods. The Commissioner (Appeals) upheld the decision, citing misdeclaration and the need for proper authorization. However, the Appellant argued that the goods were correctly described in the Bill of Entry, and they had no intention of violating the law.

Confiscation of Goods and Imposition of Penalty under Section 111(d) of the Customs Act:
The Department of Telecommunication clarified that cordless phones with specific features were not permitted for use. Despite this, the Appellant, relying on a DGFT clarification that the import was freely allowable without additional conditions, claimed bona fide in importing the goods. The judge noted that the Appellants, upon learning of the restriction, requested re-export, indicating no ulterior motives. Consequently, the judge set aside the confiscation and penalty, allowing the re-export of the goods.

Interpretation of Import-Export Policy and DGFT Clarification:
The Appellant argued that the Import-Export Policy allowed the import of cordless phones without restrictions, supported by a DGFT clarification stating the item was freely importable without conditions. This clarification played a crucial role in the judge's decision to overturn the confiscation and penalty, as it indicated the Appellant's lack of intent to violate regulations.

Restrictions on the Use of Cordless Phones by the Ministry of Communications:
The Ministry of Communications had restrictions on the use of cordless phones with specific features, leading to the confiscation of the imported phones. However, the judge considered the Appellant's reliance on the DGFT clarification, coupled with their request for re-export upon discovering the restrictions, as valid reasons to overturn the confiscation and penalty. The judge emphasized the importance of clarifications from relevant authorities in determining the legality of imports.