2017 (7) TMI 116 - AT - Customs

Import of prohibited item - Confiscation - failure to comply with post importation condition - import of diesel engines - Held that - The import of used diesel engines into the country is prohibited under the Foreign Trade Policy unless with backing of an express license to do so - The licence issued to the appellant that was utilised to clear the live consignment is found to be incapable of being complied with in the absence of materials and facility to manufacture diesel generator sets - confiscation and penalty upheld. The direction to redeem the goods that are physically not available with the adjudicating authority to be without authority of law and incapable of being enforced. Appeal allowed - decided partly in favor of appellant.

Summary

Issues:
1. Confiscation of diesel engines under Customs Act, 1962.
2. Alleged undervaluation and import of diesel engines.
3. Compliance with 'actual user' condition for import.
4. Retracted statement of proprietor and authenticity of documents.
5. Violation of remand order by the Tribunal.

Analysis:

1. The dispute involved the confiscation of diesel engines under the Customs Act, 1962. The Tribunal had previously remanded the matter back to the original authority for the appellant to respond to the show cause notice and have a personal hearing. The impugned order by the Commissioner of Customs confiscated diesel engines and imposed penalties on the proprietor.

2. The case revolved around the import of diesel engines, some allegedly undervalued, against multiple bills of entry. Investigations revealed discrepancies in declared values and non-compliance with 'actual user' conditions. The purpose of import seemed misleading, with engines being sold instead of being converted into diesel generating sets.

3. The impugned order considered the retracted statement of the proprietor and the authenticity of documents provided by the appellant. Compliance with the 'actual user' condition was crucial, and failure to do so led to confiscation under specific sections of the Customs Act.

4. The appellant raised concerns about the violation of the Tribunal's remand order, non-adherence to time limits, and the adjudicating authority's doubts about the authenticity of submitted documents. The appeal also questioned the reliance on the retracted statement.

5. The Tribunal, after hearing both sides and examining the records, upheld the confiscation and penalties for non-compliance with import conditions. Past imports not available for confiscation were exempted, but liability and penalties were upheld. The direction to redeem physically unavailable goods was deemed unlawful.

In conclusion, the appeal was partly allowed, with the Tribunal affirming the confiscation and penalties while addressing concerns raised by the appellant regarding the enforcement of certain directions.