2021 (11) TMI 253 - AT - Customs

Legality of import without Importer-Exporter Code (IEC) - import of Piano - restricted or prohibited item - imported goods were not meant for sale in market and imported for personal use - Confiscation - redemption fine - penalty - HELD THAT - It is an admitted fact that the goods in question is covered under HSN No. 9804900 which is not freely importable but restricted subject to value limit of ₹ 2000/- (C.I.F.) and other conditions as specified in Clouse 3(1) of the Foreign Trade (Exemption from application of Rules in certain cases) order 1993, which appellant had asserted all along before the adjudicating authority and the Commissioner (Appeals) but the goods were directed to be confiscated for violation of Section 7 of the Foreign Trade (Development Regulation) Act, 1992 read with Foreign Trade Policy para 2.12 and 2.8 of 2009-2014. Further, there is no denial of the fact that in the said Foreign Trade (Exemption from application of Rules in certain cases) order 1993 under Order No. 3(I) any person importing goods through the post/courier or otherwise for his personal use except certain item including consumer electronic items is covered under such exemption when the CIF value of such goods shall not exceed of ₹ 2000/-. Therefore, admittedly this goods is a restricted item but there is no absolute restriction or prohibition available for such import of goods except that in case the CIF value of goods is above ₹ 2000/- the same is subjected to customs duty which appellant had paid @ 35% CVD SAD, as per submissions of learned Counsel for the appellant. The order of confiscation with option for redemption fine and penalty for importer/appellant not having IEC number is not sustainable in law and facts - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Legality of import without Importer-Exporter Code (IEC)

Analysis:
The appeal challenges the legality of an import without an Importer-Exporter Code (IEC). The appellant imported a "PIANO" for personal use, valued at ?16,05,389, without the required IEC number. The appellant filed a Bill of Entry for clearance through a Custom House Agent with a permanent IEC number designated for individuals. The import was deemed in violation of Section 111(d) of the Customs Act, resulting in an order of confiscation with an option for redemption on payment of a fine and a penalty. The Commissioner of Customs (Appeals) upheld the order but reduced the redemption fine and penalty. The appellant contests this decision.

Upon reviewing submissions, case records, statutory provisions, and case laws, it is noted that the imported goods fall under a restricted category with a value limit and specific conditions. The appellant contended that the goods were exempt under certain conditions, including a CIF value not exceeding ?2000. While the goods were restricted, there was no absolute prohibition on importation, but the use of an IEC number was mandatory. The appellant used a permanent IEC number for non-commercial importers as required. The payment of duties at a rate higher than for commercial imports further supports the appellant's case. The argument that import for personal use without an IEC code violates Foreign Trade Policy is countered by a precedent stating otherwise. The circular clarifies the use of a permanent IEC number for personal imports not connected with trade or manufacturing. Thus, the order of confiscation and penalties for lacking an IEC number is deemed legally unsustainable.

In the final order, the appeal is allowed, and the decision of the Commissioner of Customs (Appeals) is set aside, concluding the case in favor of the appellant.