2014 (10) TMI 333 - AT - Customs

Import of Sodium Cyanide - non production of the CIB certificate as required in terms of the provisions under Section 3(e) of the Insecticide Act 1968. - Confiscation of goods - Redemption fine - Penalty u/s 112 - Held that - Provisions of the Insecticides Act provide for registration being taken by any person desiring to import or manufacture any insecticide may apply to the Registration Committee for the importation of such insecticide. It is further provided that where any person referred to in the preceding proviso fails to make an application under that proviso within the period specified (seventeen months) he may make such application at any time thereafter on payment of a penalty as specified. Further Section 17 of the Insecticides Act has provided no person shall himself or by any person on his behalf import or manufacture any insecticide except in accordance with the condition on which it was registered under the Insecticides Act the Legislation has used the word manufacture i.e. manufacture or home consumption under Section 17 of the Insecticides Act read with para 2.36 of the Foreign Trade Policy 2009-2014. It is very clear that restricted goods may be imported under Customs Bond for the purpose of re-export the provision of the Insecticides Act is not attracted. I follow the view taken by the Hon ble High Court of Kerala in the case of Maliakkal Industry Enterprises (2013 (8) TMI 100 - KERALA HIGH COURT) which is also affirmed by clarification dated 23.06.2003 issued by DGFT Ministry of Commerce & Industry - Decided in favour of assessee.

Summary

Issues:
1. Import of "Sodium Cyanide" without the required CIB certificate.
2. Confiscation of goods under Section 111(d) and imposition of penalties.
3. Appeal based on provisions of the Foreign Trade Policy and Insecticides Act.
4. Rejection of appeal by the Commissioner (Appeals) and grounds for appeal before the Tribunal.
5. Interpretation of the Insecticides Act and applicability in cases of import for re-export.

Analysis:
The case involves the appellant, engaged in import-export business, appealing against an Order-in-Appeal due to the import of "Sodium Cyanide" without the necessary CIB certificate, leading to confiscation of goods under Section 111(d) and imposition of penalties. The appellant contended that under the Foreign Trade Policy, import of restricted items for export under Customs Bond is permitted without a license, citing relevant case law. The Commissioner (Appeals) rejected the appeal, stating that Insecticides Act provisions apply regardless of re-export intentions, leading to the appeal before the Tribunal.

The appellant argued various grounds, emphasizing that the Insecticides Act should not apply to goods imported for re-export, and the Commissioner misinterpreted the Foreign Trade Policy. Additionally, the appellant relied on legal precedents and clarifications regarding import under Customs Bond for re-export purposes. The Tribunal considered the provisions of the Insecticides Act, emphasizing the need for registration for import or manufacture of insecticides. However, it concluded that for goods imported under Customs Bond for re-export, the Insecticides Act provisions do not apply, aligning with the stance taken by the High Court of Kerala and a clarification by the DGFT.

In the final judgment, the Tribunal allowed the appeal, setting aside the impugned order and granting the appellant relief concerning redemption fine, penalty, and interest. The decision was based on the interpretation that the Insecticides Act does not apply to goods imported under Customs Bond for re-export, in line with legal precedents and official clarifications.