2016 (11) TMI 176 - AT - Customs

Confiscation of imported goods u/s Sections 111(d) of the CA, 1962 - option to pay redemption fine u/s 125 of the act - imposition of penalties - import of consignment containing 6 Dumper Caterpillar - 730 - interpretation of statute - prohibition and restriction - whether the said dumpers imported by Appellant will have to conform to the conditions set out in the Import Licensing Notes to Chapter 87 prescribed under Import-Export policy 2004-2009 for new motor vehicles ? - section 112 (a) of Customs Act, 1962 - Held that - there is no prohibition in force against import of the vehicles. There is only restriction in Import Licensing Notes of Chapter 87 of import export policy 2004-2009, that importation of new vehicles shall be permitted only through specified Customs Port at Nhava Sheva, Kolkatta, Chennai, ICD-Tuglakhabad, Delhi Air Cargo and Mumbai Port Other conditions of import are also specified in the said Licensing notes. However, there is no prohibition on their importation. By any stretch of imagination, the word restriction cannot be equated or read as prohibition . This being so, invocation of 111(d) is not in order, Possibly one or more of the situations attracting confiscation as listed out in 111(a) to (p) may well have been applicable to the facts of this case, but definitely not 111(d). In the event the goods are not liable for confiscation under 111(d) and by implication the invocation of 112(a) and Section 125 are also not sustainable. We therefore have no hesitation in setting aside the impugned order to the extent of confiscation of the goods under Section 111(d), imposition of redemption fine under Section 125 and imposition of penalty under Section 112 (a) of the Act (ibid) - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Interpretation of Customs Tariff Heading 87041090
- Conformity to conditions set in Import Licensing Notes to Chapter 87
- Application of Sections 111(d), 112(a), and 125 of Customs Act, 1962

Interpretation of Customs Tariff Heading 87041090:
The Appellant imported dumpers under Customs Tariff Heading 87041090, claiming them as 'motor vehicles for the transport of goods'. The Commissioner of Customs concluded that these dumpers are considered vehicles under the Motor Vehicles Act, requiring compliance with Motor Vehicles Rules and Import Licensing Notes to Chapter 87. The Commissioner also noted the absence of evidence to prove compliance with the mentioned conditions. However, the Tribunal found that the dumpers were not prohibited goods, and the importation was not against any prohibition. The Tribunal emphasized that the term 'restriction' in the Import Licensing Notes does not equate to 'prohibition'. Therefore, the invocation of Section 111(d) for confiscation was deemed inappropriate, and the Tribunal set aside the order regarding confiscation.

Conformity to conditions set in Import Licensing Notes to Chapter 87:
The Commissioner's order imposed a significant Customs Duty, proposed confiscation of the goods, and levied a penalty under Section 112(a) of the Customs Act, 1962. The Appellant argued that the confiscation under Section 111(d) was unjustified as the dumpers were not prohibited goods and were properly imported. The Department contended that since Visakhapatnam port was not a notified port for new motor vehicles, the goods were contrary to the prohibition, justifying confiscation. However, the Tribunal ruled that the goods did not meet the criteria for confiscation under Section 111(d) and subsequently overturned the decision on confiscation, redemption fine, and penalty under Section 112(a).

Application of Sections 111(d), 112(a), and 125 of Customs Act, 1962:
The Tribunal analyzed the provisions of Sections 111(d), 112(a), and 125 of the Customs Act, 1962. It highlighted that in the absence of a prohibition on the import of the dumpers, the invocation of Section 111(d) for confiscation was incorrect. As there was no basis for confiscation under Section 111(d), the penalties under Sections 112(a) and 125 were deemed unsustainable. Consequently, the Tribunal allowed the appeal, setting aside the order related to confiscation, redemption fine, and penalty under Section 112(a) of the Customs Act, 1962.