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2020 (9) TMI 484 - AT - CustomsProvisional release of seized goods - In-shell Walnuts imported under the DFIA Scheme - exemption under N/N. 98/2009-Cus dated 11.09.2009 - HELD THAT - The imported In-shell walnuts are not liable for confiscation and the exemption claimed by the Appellant appears to be correct in view of the judgement of the Hon ble Madhya Pradesh High Court in case of GLOBAL EXIM ANOTHER VERSUS THE UNION OF INDIA OTHERS 2018 (10) TMI 1485 - MADHYA PRADESH HIGH COURT and the order of the co-ordinate Bench of this Tribunal in case of M/S UNI BOURNE FOOD INGREDIENTS LLP VERSUS COMMISSIONER OF CENTRAL EXCISE, HYDERABAD-II 2019 (3) TMI 1449 - CESTAT HYDERABAD . It has been held in the said decided cases that In-shell Walnut is allowed to be imported against the DFIA issued for export of assorted confectionery and biscuits under SION E1 and E5 respectively as input items namely, Nut and Nut products, relevant food flavour, flavouring agent/flavour improvers, dietary fibre and fruit/cocoa powder. The ratio of the judgment in the case of Global Exim was held to be inapplicable to the facts of the present case by the learned Commissioner of Customs on the ground that the said judgment delivered by the Hon'ble Madhya Pradesh High Court was accepted by the department and not appealed against on the monetary limit fixed by the CBEC - With regard to the precedential value of the decision of this Tribunal in the case of M/s Unibourne Food Ingredients LLP, the learned Commissioner of Customs has held that such order of the Tribunal has not been accepted and the department is in the process of filing an appeal before the Hon'ble High Court of Telangana. Further, the technical opinion dated 08.08.2018 furnished by the Joint Director, JNCH Lab, opining that walnuts may be used of source of dietary fibres in the manufacture of Biscuits/Cookies and confectionery was not discussed by the learned Commissioner of Customs in the impugned communication dated 28.06.2019. In order to meet the ends of justice, as an interim measure, the impugned communication directing the appellant for execution of Bond/Bank Guarantee and submission of undertaking for payment of the future adjudged dues should be stayed till final disposal of the case through proper adjudication process - Appeal allowed.
Issues:
1. Provisional release of seized In-shell Walnuts under the DFIA Scheme. 2. Confiscation of goods under Section 111(o) of the Customs Act, 1962. 3. Legal validity of the seizure of imported goods. 4. Interpretation of the exemption claimed by the Appellant. 5. Precedential value of previous judgments. Provisional Release of Seized In-shell Walnuts: The appeal challenged the communication/order by the Commissioner of Customs for the provisional release of 791 bags of In-shell Walnuts seized under the DFIA Scheme. The Commissioner imposed conditions including execution of a bond, furnishing a bank guarantee, and submission of an undertaking for future dues payment. The Appellant contested the seizure, leading to the appeal before the Tribunal. Confiscation of Goods under Section 111(o) of the Customs Act, 1962: The Customs authorities seized the In-shell Walnuts, believing they were liable for confiscation under Section 111(o) of the Customs Act, 1962, due to alleged wrongful duty exemption claim. The Commissioner upheld the seizure, prompting the Appellant to appeal, arguing against the confiscation and the legality of the seizure under Section 110 of the Act. Legal Validity of the Seizure of Imported Goods: The Appellant contended that the seizure of the imported In-shell Walnuts was improper and contrary to Section 110 of the Customs Act, 1962. The Appellant cited legal precedents, including a judgment from the Madhya Pradesh High Court and a Tribunal order, to support the argument that the goods were not liable for confiscation. Interpretation of the Exemption Claimed by the Appellant: The Appellant claimed exemption under Notification No. 98/2009-Cus dated 11.09.2009 for the imported In-shell Walnuts. The dispute arose from the classification of the goods as dietary fiber under the DFIA Scheme, leading to the Customs authorities' seizure. The Tribunal analyzed the exemption claim and legal provisions to determine the correctness of the Appellant's position. Precedential Value of Previous Judgments: The Tribunal considered the precedential value of prior judgments, including one from the Madhya Pradesh High Court and a Tribunal order related to similar cases. The Tribunal found that the imported In-shell Walnuts were not liable for confiscation based on the legal interpretations provided in those judgments. The Tribunal also noted the technical opinion supporting the use of walnuts as a source of dietary fiber, which was not adequately addressed by the Commissioner in the impugned communication. In conclusion, the Tribunal, after hearing both sides and examining the records, held that the imported In-shell Walnuts were not liable for confiscation. The Tribunal found merit in the Appellant's arguments, supported by legal precedents and technical opinions. As an interim measure, the Tribunal stayed the impugned communication/order and directed the unconditional release of the seized goods. The authorities were instructed to return the bond and bank guarantee within a specified timeframe. The appeal was allowed, and the miscellaneous application was disposed of, emphasizing the need for proper adjudication processes for the final resolution of the case.
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