2006 (10) TMI 359 - AT - Customs

Summary

Issues:
- Alleged contravention of Notification No. 35 (RE-2003)/2002-2007 under Foreign Trade Development and Regulation (FTDR) Act, 1992
- Confiscation of goods under Section 111(d) of the Customs Act, 1962
- Imposition of redemption fine and penalty under relevant sections
- Compliance with Import Policy Procedure and Hazardous Chemical Rules

Analysis:
The appeal was filed against an Order-in-Original passed by the Commissioner of Customs, Visakhapatnam, regarding the import of 'Acetone' under a specific Notification. The Revenue issued a Show Cause Notice alleging non-compliance with the Notification and Para 1b, leading to the confiscation of goods under Section 111(d) of the Customs Act, 1962. The Commissioner imposed a redemption fine and penalty, which the appellants challenged. The appellants argued that they were regular importers following proper procedures and were unaware of the Notification at the time of import. They contended that the Customs authorities could not proceed against them under the mentioned sections as the Notification was issued under Section 5 of FTDR Act, not Section 3(2). They highlighted the timing of the Notification, import, and notice issuance, emphasizing lack of awareness due to the short duration between events.

The Tribunal carefully reviewed the case records and noted that the Customs Authorities allowed the import and warehousing of the goods even though the Notification required prior intimation. The appellants had complied with Rule 18(2) of Hazardous Chemical Rules, 1989. The Tribunal found no deliberate violation of the Notification by the appellants. Regarding the legal aspect, the Tribunal agreed with the appellants that the Notification was issued under Section 5, not Section 3(2) of FTDR Act. Therefore, Section 11 of the Customs Act would not be applicable to the goods. Citing Section 3(3) of FTDR Act, the Tribunal concluded that the Commissioner's order confiscating the goods under Section 111(d) read with 3(2) and 3(3) of FTDR Act was incorrect. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.

In summary, the Tribunal found that the appellants had not violated the Notification intentionally, considering the circumstances of import and lack of Customs awareness. The legal interpretation favored the appellants, leading to the setting aside of the Commissioner's order and the allowance of the appeal.