2008 (8) TMI 111 - AT - Customs

Appellants had imported Emu chicks and eggs claiming the benefit of Notification no. 23/98 - these imports were not under any specific import licence therefore, confiscation was justified since there was no mala fide intention to import unauthorizedly, penalty is not imposable heading 01.05 covers certain specified birds and species thereof and Heading 01.06 covers other live animals EMU birds was rightly classified under heading 01.06 by Commissioner

Summary

Issues:
Classification of imported Emu birds under Customs Notification No. 23/98, Confiscation of goods under Section 111(d) of the Customs Act, Imposition of fine and penalty, Interpretation of 'pureline poultry stock' for exemption under the Notification.

Classification of Emu Birds:
The appellants imported Emu birds claiming exemption under Customs Notification No. 23/98. The Commissioner classified the birds under Heading 01.06, denying the exemption and demanding duty. The appellants argued that the birds were 'poultry stock' supported by certificates. The issue was whether Emu birds could be considered 'pureline poultry stock' under the Notification. The Tribunal found that Emu birds could fall under Heading 01.06 as 'other birds not specified in Heading 01.05'. The appellants were granted an opportunity to establish that the imported birds were 'pureline poultry stock'.

Confiscation and Imposition of Fine:
The Commissioner ordered confiscation of the birds under Section 111(d) for lack of a specific import license. A fine of Rs. 3 lakhs and a penalty of Rs. 2 lakhs were imposed. The Tribunal upheld the confiscation but reduced the fine and penalty to Rs. 1 lakh and Rs. 50,000 respectively. Mitigating circumstances, such as pending license applications and recommendations for issuance, were considered in reducing the penalties.

Interpretation of Exemption Notification:
The Tribunal emphasized strict interpretation of exemption notifications. The term 'pureline poultry stock' in the Notification had to be strictly construed. The appellants were given the opportunity to provide evidence that the Emu birds were 'pureline poultry stock' to claim the benefit of the exemption. The matter was remanded to the Commissioner for a fresh examination after allowing the party to present evidence and be heard.

In conclusion, the Tribunal upheld the classification and confiscation of the birds but reduced the fine and penalty. The issue of whether the birds qualified for the benefit of the Notification was to be re-examined by the Commissioner. The appellants were granted the chance to establish the 'pureline poultry stock' status of the imported Emu birds.