2017 (3) TMI 761 - AT - Customs

Illegal import - Beef Tallow, imported directly - confiscation - penalty - whether Beef Tallow imported by the appellant and sought clearance of the same after producing the licenses, are liable for confiscation or otherwise? - Held that - at the time of import, item Beef Tallow was to be canalized and needs to be imported through State Trading Corporation. The issue of direct import by the appellant is covered against them having not imported through State Trading Corporation - appellant could have entertained a bonafide belief that direct import of Beef Tallow under the Import & Export Policy can be done so for earlier order before 5th June 1981, and post this date will be required to be done through State Trading Corporation - confiscation and penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether Beef Tallow imported directly by the appellant, bypassing the requirement to import through the State Trading Corporation of India, is liable for confiscation and penalty under the Customs Act, 1962.

Analysis:
The appeal revolved around the import of Beef Tallow by the appellant directly, contrary to the requirement of importing it through the State Trading Corporation of India. The Revenue contended that the direct import was illegal, leading to the confiscation of the goods and imposition of penalties. The appellant argued that their actions were based on a bonafide belief that direct import was permissible under the Import Policy 1980-81. They cited legal precedents, including judgments of the Hon'ble High Court of Bombay, to support their position.

The Tribunal examined the relevant Import Policies and legal precedents cited by both parties. It noted that at the time of import, Beef Tallow was supposed to be canalized and imported only through the State Trading Corporation. However, the appellant's belief that direct import was permissible before a specific date was found to be reasonable based on the legal interpretations provided by the Hon'ble High Court of Bombay in previous cases.

The Tribunal agreed with the appellant's argument that their actions were in accordance with the Import Policy prevailing before a certain date and that the subsequent changes requiring import through the State Trading Corporation did not apply retroactively. Therefore, the Tribunal held that the confiscation of the goods was unwarranted and set it aside. As a result, the question of imposing a penalty did not arise, and the appeal was allowed, with the impugned order being set aside.

In conclusion, the Tribunal's decision focused on the interpretation of the Import Policy, the requirement of canalization for Beef Tallow import, and the appellant's bonafide belief in the legality of their actions based on relevant legal precedents. The judgment clarified the applicability of import regulations and highlighted the importance of considering the historical context and legal interpretations in customs cases.