2016 (10) TMI 723 - AT - Customs

Confiscation of consignment - option to pay redemption fine of ₹ 5,20,000/- - imposition of penalty of ₹ 2,60,000/- - import of 25MTs of Turkish White Poppy Seeds after expiry of registration certificate - certificate of registration issued by the Central Bureau of Narcotics (CBN), Gwalior - whether the goods imported after the validity period of registration certificate liable to be confiscated? - reliance placed on the decision of the case of Guru Ispat Ltd. Vs. Commissioner of Customs (Port), Calcutta 2002 (7) TMI 642 - CEGAT, KOLKATA - Held that - the decision of the case Guru Ispat Ltd. does not apply as the issue decided is entirely different. In the case, the goods were shipped wrongly by the foreign supplier whereas as per the fact of the present case, the mistake is on the part of the appellant that despite knowing the validity of the registration they allowed foreign supplier to ship the goods. The mistake has occurred, there is no mala fide behind such mistake or to gain undue benefit from such mistake. The justice can be met if redemption fine and penalties are reduced - Redemption fine reduced from ₹ 5,20,000/- to ₹ 2 lakhs and penalties from ₹ 2,60,000/- to ₹ 1 lakh - appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
Import of goods beyond the validity period of registration certificate.
Confiscation of goods under Section 111(d) and imposition of penalty under Section 112(a) of the Customs Act, 1962.
Validity of registration certificate and compliance with import conditions.
Appellant's submission of unintentional mistake and reliance on judgments.
Revenue's argument of non-compliance with registration requirements.
Reduction of redemption fine and penalties by the Tribunal.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI concerned the import of Turkish White Poppy Seeds beyond the validity period of the registration certificate issued by the Central Bureau of Narcotics (CBN). The appellant imported the goods on 28.3.2014, while the registration certificate was valid until 23.4.2014. The Customs authority confiscated the goods under Section 111(d) and imposed a redemption fine of &8377; 5,20,000/- along with a personal penalty of &8377; 2,60,000/- under Section 112(a) of the Customs Act, 1962.

The appellant argued that the contract for the import of the goods was valid until 31.3.2014, and the foreign supplier shipped the goods on 28.3.2014 based on this contract. They contended that they informed the Customs department about the situation and cited the Foreign Trade Policy provision that deems an authorization valid until the last date of the concerned month. The appellant proposed to re-export the goods, highlighting unintentional mistake and sought relief based on previous judgments.

On the other hand, the Revenue contended that the goods were indeed imported after the expiration of the registration, emphasizing the non-compliance with the vital condition of CBN registration for import. The Revenue argued that the goods were liable for confiscation due to the lack of valid registration at the time of import.

After considering the submissions, the Tribunal acknowledged that the foreign supplier shipped the goods in accordance with the contract's validity period. However, the Tribunal noted that despite knowing the registration's validity until 23.3.2014, the appellant did not inform the supplier, leading to the illegal import. The Tribunal distinguished the present case from the judgments cited by the appellant, where the mistake was attributed to the foreign supplier, not the importer.

Ultimately, the Tribunal found no mala fide intention behind the mistake and decided to reduce the redemption fine from &8377; 5,20,000/- to &8377; 2 lakhs and the penalties from &8377; 2,60,000/- to &8377; 1 lakh. The Tribunal partially allowed the appeal based on the circumstances of the case and the reduction in fines and penalties was deemed sufficient to meet the ends of justice.