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Issues: Classification of imported goods under Customs Tariff Heading, Requirement of specific import license, Imposition of fine and penalty under Customs Act
The judgment by the Appellate Tribunal CESTAT, Mumbai involved the classification of imported goods described as 'dried garlic' under Customs Tariff Heading 0712.90. The appellants imported the goods from M/s. Asian Export Pvt. Ltd., Singapore, but upon examination, the goods were found to be garlic falling under CTH 0703.20, not under the claimed CTH 0712.90. Importing goods falling under CTH 0703.20 required a specific license, which the importers failed to produce, leading to confiscation of the goods with an option to redeem them by paying a fine of Rs. 8 lakhs, along with a penalty of Rs. One lakh imposed under Sec. 112(a) of the Customs Act. Upon hearing both sides, the Tribunal found that there was no conclusive evidence to determine that the imported goods were garlic and not dried garlic. The import took place before a circular issued by DGTD on 17-9-1999, which clarified the treatment of garlic with moisture content not exceeding 10% as dried garlic. The Tribunal relied on the commercial parlance test for classification, citing precedents like J.B. Impex v. CC, Nhava Sheva and the decision in Dab Exports case. These cases established that the circular of 17-9-99 was not retrospective and did not apply to imports made before its issuance, thus dried garlic did not require a specific import license. The Tribunal dismissed the reliance on the importer's admission by the ld. SDR, as the import documents consistently referred to the goods as dried garlic from China Origin. The Tribunal emphasized that without any concrete evidence to prove that the goods were garlic and not dried garlic, the import should be considered valid. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellants.
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