2016 (5) TMI 832 - AT - Customs

Confiscation in lieu of redemption fine - Imposition of penalty - Export of skimmed milk powder - prohibited by DGFT Notification No. 23(RE-2010/2009-2014 dated 18/2/2011. Held that - the shipping bills was presented on 10/2/2011 and 16/2/2011 and on the date of entry of the goods the goods was not prohibited. The goods arrived at the customs area on 22/2/2011 and 23/2/2011 even if these dates are considered on these dates also goods were not prohibited as per notification No. 23(RE-2010/2009-2014 dated 18/2/2011 read with transitional provision as provided under para 1.5 of Foreign Trade Policy 2009-2014 therefore even though the goods were declared prohibited on 18/2/2011 transitional provision was restricted in certain condition by notification No. 37(RE-2010)/2009-2014 dated 24/3/2011. But the fact remains that on the date of entry of the goods in terms of Section 50 the goods were not prohibited therefore confiscation under Section 113(d) was not warranted. It is also noted that at the time of opening L.C. dispatch of the goods from the factory to the port filing of shipping bill before the customs the goods were not notified as prohibited goods therefore it is beyond the control of exporter to avoid the dispatch of the goods from the factory to the port. Therefore the goods cannot be confiscated. - Decided in favour of appellant with consequential relief

Issues:
1. Confiscation of goods under Section 113(d) of the Customs Act, 1962.
2. Redemption of confiscated goods on payment of fine and penalty.
3. Interpretation of notifications by the Directorate General of Foreign Trade (DGFT).
4. Applicability of transitional provisions under the Foreign Trade Policy.
5. Adjudication of goods becoming prohibited for export.
6. Legal provisions under Sections 113(d) and 114(i) of the Customs Act, 1962.

Analysis:

1. The judgment revolves around the confiscation of goods under Section 113(d) of the Customs Act, 1962. The Commissioner had ordered the confiscation of goods under this provision due to the attempted export of skimmed milk powder after it had become a prohibited item as per notifications issued by the DGFT. The issue at hand was whether the goods were rightfully confiscated under this section.

2. The orders-in-original by the Commissioner imposed fines and penalties on the appellants for redemption of the confiscated goods. The judgment analyzed whether the fines and penalties were justified in light of the circumstances surrounding the attempted export of the prohibited goods.

3. The interpretation of notifications issued by the DGFT played a crucial role in determining the legality of the attempted export. The judgment delved into the specifics of the notifications and their impact on the export of skimmed milk powder, emphasizing the importance of adhering to the provisions outlined in the notifications.

4. The applicability of transitional provisions under the Foreign Trade Policy, particularly para 1.5, was a significant aspect of the case. The judgment scrutinized whether the appellants were entitled to export the goods based on the transitional provisions despite the prohibition imposed by the notifications.

5. The adjudication process focused on establishing whether the goods had indeed become prohibited for export and whether the actions of the exporters violated the provisions of the Customs Act, 1962. The judgment examined the timeline of events leading to the attempted export to determine the legality of the confiscation.

6. Legal provisions under Sections 113(d) and 114(i) of the Customs Act, 1962 were central to the analysis of the case. The judgment highlighted the specific language of these sections and their applicability to the circumstances of the attempted export of skimmed milk powder. The decision ultimately set aside the impugned orders and allowed the appeals of the appellants, providing relief in accordance with the law.

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