2008 (10) TMI 210 - AT - Customs

Import without valid licence old and used machines - confiscation - the obligation of the appellant to possess a valid licence at the time of import (that is when the goods entered into territorial waters of India) cannot be wiped out by the amendment dated 31-8-2004 by which the requirement of licence was lifted. The provisions in para 2.26 relating to Clearance of Goods from Customs do not apply the present case. Therefore, the violations are proved and the goods are rightly confiscated under Section 111(d) of the Customs Act.

Summary

Issues:
Import of old and used machines without a specific license; Confiscation of goods under Section 111(d) of the Customs Act; Validity of license requirement at the time of import; Applicability of para 2.26 of the Exim Policy and Handbook of Procedure; Interpretation of Sections 2(23) and 2(27) of the Customs Act; Effect of amendments on rights and obligations under the Customs Act.

Analysis:

The case involved an appeal against the order of the Commissioner (Appeals) regarding the import of old and used machines without a specific license. The appellant imported a consignment of machines from the UK, which were found to be over 10 years old. The original authority enhanced the value of the machines and confiscated them for lack of a required license, allowing redemption on payment of a fine and imposing a penalty. The Commissioner (Appeals) upheld the confiscation and value enhancement based on a government-approved valuer.

The appellant argued that the requirement of a license for importing machinery over 10 years old was lifted by a notification dated 31-8-2004. The consignment arrived before this date, and they did not have the license when placing orders. They contended that clearance could be based on a license obtained subsequently as per para 2.26 of the Exim Policy. The appellant did not possess the license at the time of shipment, import, or before clearance.

The dispute centered on the relevant date for considering the license requirement. The Customs Act defines import as bringing goods into India from outside, with India including territorial waters. The obligation to produce a valid license is tied to the event of import, which is complete upon reaching Indian waters. Certain relaxations were provided for cases where a valid license expired between shipment and import, allowing it to be considered valid. However, this concession did not apply to the present case.

The tribunal held that the appellant's obligation to possess a valid license at the time of import could not be nullified by subsequent amendments lifting the license requirement. The provisions in para 2.26 did not apply, and the violations were deemed proven, leading to the rightful confiscation of goods under Section 111(d) of the Customs Act. Despite this, the redemption fine and penalty were reduced considering the circumstances of the case.

The judgment emphasized that amendments to rules or notifications do not erase pre-existing obligations under the Customs Act. The decision was pronounced on 16-10-2008, disposing of the appeal with the modified fines and penalties.