2003 (9) TMI 612 - AT - Customs

Summary

Issues: Classification under ITC heading 0402 for imported milk powder, requirement of import license for restricted goods, confiscation under Section 111(d) of the Customs Act, penalty under Section 112(a).

Classification under ITC Heading 0402:
The appellant imported milk powder with 28% fat content, claiming it fell under the category of "whole milk" eligible for free import under ITC classification heading 0402 2902. However, authorities determined the classification as 04022100, which is for milk and cream "not containing added sugar or other sweetening matter," falling under the restricted category. The Tribunal observed that the classification is based on fat content not exceeding 1.5% or exceeding 1.5%, with the appellant's consignment falling under 04022100 due to its fat content. Import of goods under this entry was restricted, justifying the customs authorities' actions.

Requirement of Import License for Restricted Goods:
The authorities held that since the goods were classified under the restricted entry 04022100, the appellant needed a license for import. Failure to obtain and produce such a license led to the goods being liable for confiscation under Section 111(d) of the Customs Act and the appellant being subject to penalty under Section 112(a). The Tribunal upheld this decision, stating that the import was in violation of the Import Trade Control Order due to the absence of the required license.

Confiscation and Penalty:
The Tribunal confirmed the confiscation of the goods and imposition of the penalty, considering the import as a violation of the Import Trade Control Order. However, taking all facts into account, the Tribunal decided to reduce the redemption fine from Rs. 3 lakhs to Rs. 2 lakhs. The impugned order was upheld with this relief, acknowledging the legal validity of the confiscation and penalty while providing a slight reduction in the financial penalty.

In conclusion, the judgment analyzed the classification of imported milk powder under the relevant ITC heading, the necessity of an import license for restricted goods, the legal basis for confiscation and penalty under the Customs Act, and the Tribunal's decision to slightly reduce the redemption fine while confirming the overall order.