2022 (1) TMI 271 - Commissioner - Customs

Seizure of export goods - Coal - prohibited goods or not - subject consignment of Coal had been procured through E-auction, which as per the Coal distribution policy could only be consumed within India and could not be exported - HELD THAT - It is apparent from the records that the goods had been seized under Section 110 of the Customs Act, 1962 under the reasonable belief that the export consignments were not eligible to be exported due to certain regulation of Coal India Limited which prohibited export of coal purchased in public auction making the coal liable for confiscation under Section 113 of the Customs Act, 1962. The subject coal along with vehicles was seized after 6 days of filing the Shipping Bill. There is no allegation of mis-declaration of goods. The exporter filed the Shipping Bill under the bona fide belief that the goods are eligible to export freely - The department seems to have gone overboard in seizing the goods merely on account of the fact that the coal procured in public auction could not be exported, in clear disregard to the fact that the exporter himself did not procure the coal in public auction and the call of the department to straightway seize the coal presented by the third party for export does not seem to be in line with the instructions of the Coal India on export of coal. The very seizure of coal along with vehicles on 6-3-2021 and issue of letter of provisional release on 16-3-2021 are prejudicial to the interests of the appellant but since these are not speaking and reasoned orders, the case should be remanded back to the respondent department to consider the entire facts of the case in the light of existing legal position and pass a well-reasoned and speaking order in this case within 15 days of the receipt of this order - appeal allowed by way of remand.

Summary

Issues:
Seizure of coal meant for export due to alleged violation of Coal India's export policy.

Analysis:
1. Seizure of Coal and Vehicles: The appeal was filed against the seizure of coal and its transporting vehicles by the officers of Land Customs Station, Nepalganj Road. The coal, meant for export to Nepal, was procured through E-auction, which was found to be in violation of Coal India's policy that restricts the export of coal purchased through public auction. The appellant contended that they were unaware of the coal's origin and had procured it from a different source, M/s. Gagan Coal Private Limited, Gujarat.

2. Grounds of Appeal: The appellant argued that they had filed the shipping bill for export in good faith, without any intention to violate regulations. They claimed to be bona fide purchasers and exporters, complying with the Customs Act, 1962, and the rules set by the Directorate General of Foreign Trade (DGFT). The appellant highlighted that there was no direct notification prohibiting the export of coal purchased indirectly from Coal India through public auction.

3. Legal Proceedings: A virtual personal hearing was conducted where the appellant's representative reiterated the grounds of appeal. The Commissioner observed that the goods had been provisionally released on the condition of furnishing cash security and a bond. The seizure was made under Section 110 of the Customs Act, 1962, with the belief that the export consignments were ineligible due to Coal India's regulations, potentially leading to confiscation under Section 113 of the Customs Act.

4. Commissioner's Decision: The Commissioner found the seizure unjustified, noting that there was no misdeclaration of goods and the appellant had acted in good faith. The Commissioner emphasized that the Customs department should have informed the appellant promptly if the goods were ineligible for export, rather than seizing them. The Commissioner referred to a similar judgment by the High Court of Meghalaya allowing third-party export of coal indirectly procured through auction. The Commissioner remanded the case back to the department for a well-reasoned order within 15 days, directing the appellant to cooperate and provide any necessary documents for a fair decision.

5. Conclusion: The appeal was disposed of with the directive to reevaluate the case in light of the legal position and issue a reasoned order within the specified timeframe. The Commissioner emphasized the importance of trade facilitation and fair treatment, urging the Customs department to act as a facilitating partner rather than an obstacle.