2016 (12) TMI 892 - AT - Customs

Confiscation - fine and penalty - Validity of licence to export goods - Held that - I find that the ITC HS Policy was amended on 06.02.2015, Providing for obtaining the licence for importation of the subject goods. It is an admitted fact that both the Customs Department and the importers were in doubt regarding importation of goods under a valid licence. Thus, Malafides cannot be attributed in the case of the present appellant, However, since the goods were imported improperly, the same are liable for confiscation as per the mandates of the Customs Statute - penalty rightly imposed - However, considering the gravity of the case, the quantum of fine and penalty reduced in the interest of justice. Therefore, the impugned order is modified to the extent of reducing the quantum of redemption fine to ₹ 20,000/- and penalty to ₹ 10,000/- Appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
Improper importation of goods due to invalid license, confiscation of imported goods, imposition of redemption fine and penalty under Customs Act, 1962, justification of redemption fine and penalty, modification of quantum of redemption fine and penalty.

Analysis:
The case involved the appellant importing "cardamom (Guatemala origin)" through ICD, Tughlakabad with an invalid license, leading to the Department confiscating the goods and imposing a redemption fine of ?4,00,000 and a penalty of ?1,00,000 under Section 112 (a) of the Customs Act, 1962. The appellant appealed to the Tribunal, arguing that at the time of contract with the overseas supplier, cardamom was freely importable, and the license was valid when the vessel arrived at the destination port. The appellant claimed that due to perishable nature and lack of clarification from DGFT regarding the ITC code, the goods were re-exported. The appellant contended that the redemption fine and penalty were not in line with statutory provisions.

The Revenue, represented by the ld. D.R., maintained that the goods were irregularly imported, justifying confiscation under Section 111 of the Customs Act, 1962. The redemption fine and penalty were deemed appropriate as per statutory provisions. The Tribunal noted the amendment in the ITC HS Policy requiring a license for importation, causing confusion among both Customs Department and importers. While malafides were not attributed to the appellant, improper importation warranted confiscation and penal consequences. The Tribunal found the redemption fine and penalty justified but deemed the quantum excessive, reducing the redemption fine to ?20,000 and penalty to ?10,000 in the interest of justice.

In conclusion, the Tribunal disposed of the appeal by modifying the impugned order to reduce the quantum of redemption fine and penalty, considering the circumstances of the case and the interest of justice. The judgment highlighted the importance of adherence to statutory provisions in importation procedures, while also balancing the penalties imposed on the appellant.