2013 (10) TMI 241 - AT - Customs

Confiscation of goods - GSM Dual SIM mobile imported - Requirement of IMEI - Held that - appellants have imported the GSM Dual SIM Mobile Phones. The lower adjudicating authority has categorically held that the handsets were having single IMEI no. This aspect has not been challenged by the department. It is not zeroes IMEI. It is also not the case of the department that the mobile phones are CDMA mobile phones . In these circumstances, the mobile handset cannot be held to be prohibited. Therefore confiscation of the impugned goods and imposition of penalty are not sustainable in law - Decided in favour of assessee.

Summary

Issues:
- Interpretation of DGFT Notification no. 112(RE-2008)/2004-2009 dated 16.06.2009 regarding import of mobile sets without IMEI/improper IMEI.
- Confiscation of GSM Dual SIM Mobile Phones due to alleged violation of DGFT Notification.
- Reduction of redemption fine and penalty by the Commissioner (Appeals).
- Applicability of Tribunal decision in Kobian ECS Pvt. Ltd. vs. CC, Mumbai 2013 (157)ELT 662.
- Legal authority of customs officials in relation to DGFT regulations.

Interpretation of DGFT Notification:
The appellant imported GSM Dual SIM Mobile Phones with one IMEI number instead of two, triggering confiscation under section 111(d) & (m) of the Customs Act, 1962. The DGFT Notification no. 112(RE-2008)/2004-2009 dated 16.06.2009 prohibits the import of mobile handsets without IMEI or with all zeroes IMEI. The lower adjudicating authority upheld the confiscation and imposed a redemption fine and penalty. However, the Tribunal noted that the handsets were not CDMA phones, and the single IMEI was not disputed. Consequently, the Tribunal ruled that the goods were not prohibited under the notification, setting aside the Order-in-Appeal and allowing the appeal.

Redemption Fine and Penalty Reduction:
The appellant contested the redemption fine and penalty imposed by the lower authorities, arguing compliance with the DGFT notification as the mobile handset contained a single IMEI. The Commissioner (Appeals) reduced the redemption fine to Rs.3 lakhs and the penalty to Rs.1 lakh. The appellant further contended that dual SIM mobile handsets with one IMEI are not prohibited goods and had already paid customs duty. The Tribunal, after considering submissions and records, found in favor of the appellant, setting aside the Order-in-Appeal and allowing the appeal.

Applicability of Tribunal Decision and Customs Authority:
The appellant relied on the Tribunal decision in Kobian ECS Pvt. Ltd. vs. CC, Mumbai 2013 (157)ELT 662 to argue that customs authorities cannot substitute DGFT regulations. The Tribunal concurred, emphasizing that the mobile handsets in question were not prohibited under the DGFT notification, leading to the reversal of the confiscation and penalties. The judgment underscores the importance of adhering to specific regulatory provisions and the limitations of customs officials in enforcing such regulations.

Conclusion:
In conclusion, the Tribunal's judgment in this case revolved around the interpretation of the DGFT notification regarding IMEI requirements for imported mobile handsets. The decision highlighted the need for strict adherence to regulatory provisions and the limited authority of customs officials in imposing penalties based on alleged violations. The appellant successfully demonstrated compliance with the relevant notification, leading to the reversal of the confiscation and penalties initially imposed.