2020 (3) TMI 650 - AT - Customs

Absolute Confiscation - restriction on import - rejection of claim for classification under heading no. 1211 9099 of First Schedule to Customs Tariff Act, 1985 and redetermined under heading no. 1211 9019 of First Schedule to Customs Tariff Act, 1975 - HELD THAT - On perusal of the ITC (HS), Schedule I of the import policy, we find that seeds are covered by heading no. 1211 9019 of the First Schedule to the Customs Tariff Act, 1975 and that, other than ambrette seed , nuxvomica , psyllium and neem , all other seeds are restricted. The appellant, admittedly, is a trader and the import of seeds, covered by the revised heading of the First Schedule to the Customs Tariff Act, 1975, is restricted. The existence of such restriction, from the elaboration in the ITC (HS), 2017, Schedule I, can only be attributed to the intent of imposing quantitative restrictions. Neither is there any discussion nor do any of aspects in the records sustain this conclusion. As the actual user condition has not been complied with, the goods are liable for confiscation. However, in the absence of any elaboration on the restriction, other than licensing condition, we find no reason to approve the absolute confiscation - Even if the apprehension of the first appellate authority that use of these seeds in medical preparations may jeopardise health of human beings, in the absence of explicit authority devolving on officers of customs for taking upon themselves such authority, the government agencies entrusted with the task of ensuring public health would not fail in discharging their responsibilities. The confiscated goods is to be released on payment of redemption fine of ₹ 50,000/-. The penalty under section 112(a) of Customs Act, 1962 is modified to ₹ 50,000/- - appeal disposed off.

Summary

Issues:
Classification of imported goods under Customs Tariff Act, 1985, and 1975; Confiscation and destruction of goods; Penalty under section 112(a) of Customs Act, 1962; Compliance with import restrictions for seeds under ITC (HS), 2017, Schedule I.

Classification of Imported Goods:
The appellant imported 'Khubkalan' seeds and faced duty liability following a reclassification under heading no. 1211 9019 of the Customs Tariff Act, 1975. The goods were confiscated, and the importer was penalized under section 112(a) of the Customs Act, 1962. The Commissioner of Customs (Appeals) confirmed the confiscation but set aside the destruction order. The appellant argued against absolute confiscation.

Compliance with Import Restrictions:
The appellant contended that even if the goods were restricted, the option to redeem should have been granted. The Authorized Representative argued that the goods were 'crude drugs' as per the bill of entry and certified as seeds by the Plant Quarantine Department. It was highlighted that some seeds were exempt from restrictions for actual users.

Interpretation of Import Policy:
The Tribunal analyzed the ITC (HS), Schedule I of the import policy, noting that seeds fall under heading no. 1211 9019 and most seeds are restricted except a few like 'ambrette seed', 'nuxvomica', 'psyllium', and 'neem'. Import of such seeds is allowed for actual users without a license, subject to conditions.

Confiscation and Penalty:
The Tribunal observed that the appellant, being a trader, imported seeds under a restricted category. While acknowledging the intent of imposing quantitative restrictions, the Tribunal disagreed with absolute confiscation. The Tribunal modified the order to allow release of goods on payment of a redemption fine and reduced the penalty under section 112(a) of the Customs Act, 1962.

Conclusion:
The Tribunal modified the order, allowing the confiscated goods to be released on payment of a redemption fine. The penalty under section 112(a) of the Customs Act, 1962 was also reduced. The appeal was disposed of accordingly, emphasizing compliance with import restrictions and the rationale behind the decision.