2023 (5) TMI 1337 - AT - Customs

Penalty - Confiscation of goods - Import of Beetle Nuts from Bangladesh - seeking permission to re-export the goods to Mayanmar and deposited the redemption fine - SAPTA Certificate - Violation of the provisions contained in DGFT s notification referred earlier, duty at Tariff Value so fixed by the government u/s 14(2) of Customs Act not charged - HELD THAT - Disputing the option to reexport the said goods subject to payment of redemption fine and duty the Appellants crave leave of the order passed by the Authorities. Referring to the Hon ble Supreme Court s decision in the case of Siemens Limited vs. Collector of Customs 1999 (8) TMI 84 - SUPREME COURT in support of their contention that redemption find and duty were not payable as the imported goods were ordered to be re-exported, they plead for quashing of the impugned order. It is evident from the show cause notice, that it carries no reference to the test report dated 02.04.2014 and therefore the Order in Original placing reliance on the said test report (samples of which were alleged to be drawn at the back of the assessee), to arrive at the impugned findings, is clearly beyond the scope of the show cause notice. Further, the imported goods have been lying all along, in the custody of the Department, notably for several months, without proper storage conditions and that the initial test reports by the laboratory CFL at Kolkata vide their test report dated 03.12.2013 have found nothing as would render the imported goods unfit for human consumption. The said order of the Department, being in violation of the Principles of Natural Justice, is clearly contrary to the prescriptions of the Hon ble Apex Court in Siemens Ltd. referred to supra. The Appellants are not liable to any penal consequences, even though the goods may have become unfit for human consumption. The two test reports when read together clearly indicate that at the time of import, there was no finding about the imported betel nuts being unsuitable for human consumption. The fact that the goods are not re-exported and are now required to be destroyed and so ordered as per due process of law by the authorities, hence no redemptions fine is imposable thereon. The Appellant is also not liable for any penalty for reasons as discussed. The impugned order is therefore, liable to be set aside. We therefore set aside the impugned order in original and allow the appeal, with consequential relief.

Summary

Issues Involved:
The issues involved in this case are the confiscation of goods under section 111(b) and 111(d) of the Customs Act, 1962, imposition of penalty under section 112 of the Customs Act, and the option to re-export goods subject to payment of redemption fine.

Confiscation of Goods:
The Appellant, engaged in import and export of Beetle Nuts, imported goods from Bangladesh claiming SAPTA Certificate benefit. Dispute arose over valuation of goods due to price revision. Despite compliance with regulations, goods were not released timely by the Department. The Appellants challenged a notification fixing tariff value, which was upheld by the Calcutta High Court. Subsequently, a show cause notice was issued for confiscation under section 111(d) & 111(l) of the Customs Act. The Department referred to test reports indicating goods' non-conformance, leading to confiscation order. Appellants sought re-export, deposited redemption fine and penalty, and challenged the order.

Imposition of Penalty:
The Appellants argued against the imposition of penalty, citing lack of malafides and willingness to pay differential duty. They contended that the show cause notice did not mention the test report used to justify penalties, indicating a violation of natural justice principles. The perishable nature of goods due to improper storage conditions in Department's custody was highlighted, along with the lack of timely response to clearance requests. The Appellants were found not liable for penalties as the goods were not unfit for human consumption at the time of import.

Option to Re-export Goods:
The Appellants disputed the option to re-export goods subject to payment of redemption fine, citing legal precedents. They argued that as the goods were ordered to be re-exported, no redemption fine or duty should be payable. The Tribunal found in favor of the Appellants, setting aside the impugned order and allowing the appeal with consequential relief.