2018 (10) TMI 110 - AT - Customs

Re-export of Confiscated goods - Redemption fine for the purpose of re-export of goods - penalty - import of prohibited goods without BIS Certification - case of Revenue is that the appellant imported the prohibited goods without any BIS certification which was rightly confiscated - non-compliance of the provisions of Foreign Trade Policy read with Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992. Held that - Admittedly the appellant did not have the BIS certification which was required for the purpose of import of the impugned goods. Further the Commissioner of Customs has rightly confiscated the goods. Further, in view of the order of the Commissioner of Customs, the goods have been re-exported also vide various shipping bills which are on record dated 05.02.2018. The Hon ble Supreme Court in the case of Siemens Ltd. 1999 (8) TMI 84 - SUPREME COURT OF INDIA held that once the goods are re-exported then in that event, the redemption fine is not imposable - thus, redemption fine imposed by the Commissioner for the purpose of re-export is not sustainable in law. Penalty - Held that - Since the appellant has violated the conditions of Foreign Trade (Development and Regulation) Act, therefore, the penalty imposed on the appellant under Section 112(a) is justified - penalty upheld. Appeal allowed in part.

Summary

Issues:
- Confiscation of goods under Customs Act
- Redemption of goods for re-export on payment of fine
- Imposition of penalty under Customs Act
- Non-compliance with BIS certification requirement
- Challenge to redemption fine and penalty

The judgment by the Appellate Tribunal CESTAT Bangalore involved the confiscation of goods under the Customs Act, the redemption of goods for re-export on payment of a fine, and the imposition of a penalty. The Commissioner had ordered the confiscation of goods covered under various Bills of Entry under the provisions of Section 111(d) and 111(o) of the Customs Act, 1962, along with Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992. The appellant had filed Bills of Entry for clearance of goods described as "Galvanised steel Tubes for structural purpose" without the required BIS certification, leading to the confiscation of goods and imposition of a redemption fine of ?10,00,000 and a penalty of ?1,00,000 under Section 112(a) of the Customs Act.

The appellant challenged the imposition of the redemption fine and penalty, arguing that the goods had been re-exported as per the Commissioner's order. The appellant contended that once the goods were re-exported, the imposition of redemption fine and penalty was not sustainable in law, citing the decision of the Supreme Court in Siemens Ltd. vs. Collector of Customs. The appellant also referenced the Mumbai Bench of CESTAT's decision in Zenith Rubber & Plastic Works vs. CC, Mumbai in support of their argument against the redemption fine and penalty.

After hearing both parties and reviewing the evidence, the Tribunal found that the appellant had indeed failed to produce the required BIS certification for the imported goods, justifying the confiscation of goods. However, considering the re-export of goods as per the Commissioner's order and the legal precedent set by the Supreme Court and the Tribunal, the Tribunal concluded that the redemption fine imposed for re-export was not sustainable in law. Consequently, the Tribunal set aside the redemption fine. On the other hand, the penalty imposed under Section 112(a) of the Customs Act was upheld due to the appellant's violation of the conditions of the Foreign Trade (Development and Regulation) Act. Thus, the Tribunal partially allowed the appeal, setting aside the redemption fine while upholding the penalty.

In conclusion, the judgment addressed the issues of confiscation, redemption for re-export, and penalty imposition under the Customs Act, emphasizing the importance of compliance with certification requirements and the legal implications of re-exporting goods in such cases.