2019 (4) TMI 39 - AT - Customs

Import of restricted item or not - Remote control toy Quadcopter - Remote Control Toy Monster Truck - Whether the impugned goods come within the scope of Drones or not - Confiscation - Held that - At the time of import of drones in the year 2017 by the appellant, there was restriction by DGCA and DGFT and as per the restriction permission of the DGCA and licence from the DGFT was required whereas the appellant did not have the permission from the DGCA and also did not have any licence form DGFT for import of the impugned goods - Further, at the time of import, DGCA was in the process of finalizing the guidelines and the same was finalized on 27/08/2018 wherein the impugned goods are now can be imported without any permission from DGCA and without obtaining any licence from DGFT. But during the period of import, there was a restriction for import of drones. Since the appellant did not have the permission of DGCA and licence from DGFT, the original authority confiscated the goods and also imposed a fine of ₹ 17000/- for contravention under Section 112(a) of the Customs Act, 1962. Permission to re-export of goods - Held that - Since the goods have been confiscated being restricted during the time of import but the same is allowed to import after the guidelines of DGCA without any licence. In view of this, confiscated goods is allowed to be exported by the appellant. Penalty u/s 112(a) of the Customs Act, 1962 - Held that - There is absolutely no justification and reasons given in the Order-in- Original for imposition of the said penalt - Penalty set aside. Appeal disposed off.

Summary

Issues:
- Classification of imported goods as drones
- Requirement of permission and license for import
- Applicability of guidelines at the time of import
- Confiscation of goods and imposition of penalty

Classification of Imported Goods as Drones:
The appellant imported Remote Control Quadcopter and Remote Control Toy Monster Truck, classifying them under CTH 95030090. The goods were examined, and it was observed that the Quadcopter was capable of flying at low altitude, leading to concerns regarding its classification as a drone. The distinction between drones and quadcopters was highlighted by the appellant, emphasizing that the imported goods fell under the Nano category, exempting them from certain regulations. The argument focused on the technical differences between drones and quadcopters and the perception of laymen regarding these terms.

Requirement of Permission and License for Import:
The Directorate General of Civil Aviation (DGCA) and the Directorate General of Foreign Trade (DGFT) had issued regulations requiring prior clearance and import licenses for Unmanned Aerial Vehicles (UAVs) and drones. The appellant failed to obtain the necessary permissions, leading to the confiscation of the goods and the imposition of a penalty. The appellant argued that the guidelines exempted Nano category imports from requiring permits, highlighting the subsequent guidelines issued by DGCA permitting such imports without restrictions.

Applicability of Guidelines at the Time of Import:
The dispute centered on the timing of the import in 2017, when regulations mandated permissions and licenses for drone imports. The appellant contended that the subsequent guidelines issued in 2018 exempted Nano category imports, making the goods eligible for import without restrictions. The Tribunal considered the timeline of events and concluded that the restrictions were applicable during the import period, justifying the confiscation of goods due to non-compliance with regulatory requirements.

Confiscation of Goods and Imposition of Penalty:
The original authority confiscated the goods and imposed a penalty for contravention under Section 112(a) of the Customs Act, 1962. The Tribunal, after evaluating the submissions and relevant regulations, allowed the confiscated goods to be exported by the appellant. The penalty imposed was deemed unjustified and lacking proper reasoning, leading to its setting aside by the Tribunal. The judgment highlighted the absence of justification for the penalty in the original order and the subsequent affirmation in the impugned order.

In conclusion, the Tribunal disposed of the appeal by permitting the export of confiscated goods and setting aside the imposed penalty, emphasizing the importance of compliance with regulatory requirements at the time of import and the subsequent changes in guidelines affecting the import eligibility of the goods.