2011 (1) TMI 113 - AT - Customs

Waiver of pre deposit - This appeal is directed against the ld. Commissioner s order confiscating the goods in question under Sec.111(d) of the Customs Act (with option for redeeming the same on payment of a fine of Rs. 30 lakhs) and imposing a penalty of Rs. 20 lakhs under Sec. 112(a) of the Act - The Hon ble High Court held that it was not open to the DGFT to alter the import policy provision by way of circulars instead of Notifications required to be issued under Sec.5 of the Foreign Trade (D & R) Act 1992 - According to the import policy such sheets were freely importable during the period of dispute and hence prima facie not liable to be confiscated - The appeal stands allowed by way of remand

Summary

Issues:
1. Confiscation of goods under Sec.111(d) of the Customs Act
2. Imposition of penalty under Sec.112(a) of the Act
3. Interpretation of import policy for Hot Rolled Steel Sheets
4. Validity of the policy circular issued by DGFT
5. Applicability of Mumbai High Court judgment on the present case

Confiscation of Goods and Imposition of Penalty:
The appeal challenged the Commissioner's order confiscating Hot Rolled Steel Sheets imported by the appellant in April 2009 under Sec.111(d) of the Customs Act and imposing a penalty of Rs. 20 lakhs under Sec. 112(a) of the Act. The appellant argued that the goods were freely importable as per the relevant classification and did not require a specific import license. However, the Revenue contended that the goods fell under a restricted category as per a notification issued by the DGFT, leading to the confiscation and penalty imposition. The Tribunal found that the appellant's argument was not accepted by the Revenue, resulting in the impugned order.

Interpretation of Import Policy and Mumbai High Court Judgment:
The appellant presented a judgment of the Mumbai High Court which invalidated a policy circular of the DGFT, stating that the circular exceeded the authority of delegated legislation. The High Court held that the DGFT could not modify import policy through circulars but required formal notifications under the Foreign Trade (Development and Regulation) Act, 1992. Acknowledging the High Court's decision, the Tribunal noted that the import policy classified Hot Rolled Steel Sheets under Exim Code 7208 as freely importable during the dispute period. Consequently, the Tribunal set aside the Commissioner's order and remanded the case for a fresh decision considering the High Court's judgment and the import policy provisions. The appeal was allowed by way of remand for further consideration.

In conclusion, the Tribunal's decision focused on the interpretation of the import policy for Hot Rolled Steel Sheets, the validity of the DGFT's policy circular, and the applicability of the Mumbai High Court judgment on the case. The Tribunal emphasized the need for the Commissioner of Customs to reconsider the case in light of the High Court's ruling and the import policy provisions to ensure a fair and just decision based on legal principles and natural justice.