2010 (11) TMI 921 - HC - Customs

Compliance with necessary requirements to import goods - Nickel Chloride - Copper Sulphate - confiscation - penalty - Held that - Section 38(1)(b) of Insecticides Act, 1968 states that import of insecticides for non-insecticidal use is not subject to the restrictions contained in the Act - as regards Copper Sulphate and Nickel Chloride under import, there was no such requirement to obtain registration certificate or import permit for their import as per EXIM policy - confiscation and penalty set aside - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Import of chemicals without required permits under relevant Acts.
2. Confiscation and penalty imposed by Customs authorities.
3. Appeal against the Tribunal's decision on confiscation.

Analysis:

Issue 1: Import of chemicals without required permits under relevant Acts
The case involves a 100% Export Oriented Unit importing chemicals without possessing necessary permits. The importer filed a Bill of Entry for clearance under Duty Exemption Notification but lacked a Registration Certificate or Import Permit from the Central Insecticide Board, as mandated by the Insecticides Act, 1968 and Foreign Trade Act, 1992. The Adjudicating Authority confiscated the imported chemicals and imposed a penalty under the Customs Act, 1962.

Issue 2: Confiscation and penalty imposed by Customs authorities
The Additional Commissioner of Customs passed an order confiscating the chemicals under Section 111(d) of the Customs Act, 1962, and levied a penalty under Section 112. The Commissioner of Customs (Appeals) upheld this decision. However, the Tribunal, in its order, sustained the confiscation of Boric Acid but set aside the confiscation of Nickel Chloride and Copper Sulphate. The Tribunal considered the lack of requirement for a registration certificate or import permit for Nickel Chloride and Copper Sulphate under the EXIM policy and the provisions of the Insecticides Act, 1968.

Issue 3: Appeal against the Tribunal's decision on confiscation
The appellant challenged the Tribunal's decision, arguing that no irregularity existed in the order to warrant interference. The High Court reviewed the Tribunal's order and found it justified. The Court agreed with the Tribunal's interpretation of the Insecticides Act, 1968, and its decision to set aside the confiscation of Nickel Chloride and Copper Sulphate. Consequently, the Court dismissed the appeal, stating that no grounds for interference were present.

This judgment clarifies the legal requirements for importing chemicals under relevant Acts and highlights the importance of complying with permit regulations to avoid confiscation and penalties. The Tribunal's decision was upheld, emphasizing the necessity of adherence to statutory provisions in import transactions.