2022 (2) TMI 1179 - AT - Customs

Misdeclaration of imported goods - MS Plates in various thickness and various sizes (stock lot) - classified under CTH 720852390 or not - impugned goods were not covered by MTC - restricted goods vide Notification No.63/2008 dated 21.11.2008 as per Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, or not - HELD THAT - The Public Notice no. 92/2009 itself envisages the situation wherein the MTC would not have been produced and directs that assessment should be made accordingly. It do not state that the proceedings leading to confiscation be initiated. Further Commissioner who has issued this public notice, directing that all the goods for which MTC is not produced be considered as Secondary / Defective / Seconds only and assessed accordingly. , has in the impugned order held the goods to be of prime quality. Having done so Commissioner could not have held any contravention in non production of MTC, which even as per Public Notice is not a mandatory requirement, but only prescribed as an aid for assessment of goods. Admittedly the impugned goods are classifiable as per ITC (HS) Code under the heading 7208 52 90 and the declared CIF value is US 425 per Tonne and hence as per this licensing note are freely importable. In the case of Sheikh Omer referred to by the learned authorized representative Hon ble Apex Court has clearly and unambiguously stated Any prohibition means every prohibition. In other words all types of prohibitions. Restriction is one type of prohibition. From item (1) of Schedule I, Part IV to Import Control Order, 1955, it is clear that import of living animals of all sorts is prohibited. But certain exceptions are provided for. But none the less the prohibition continues. Licensing Note 3 provides for exceptions and the situations in which these goods when imported are freely importable and not restricted. Commissioner has himself held that the impugned goods are prime and have cif value of US 425 per Tonne. With that finding on record the order holding goods as restricted as per Notification No 63/2008 cannot be sustained. The impugned order is completely a non speaking order, passed without consideration of any submission and the law on subject - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Confiscation of goods under Section 111(d) of the Customs Act, 1962.
2. Imposition of penalty under Section 112(a) of the Customs Act, 1962.
3. Non-production of Mill Test Certificate (MTC).
4. Classification of goods as restricted under Notification No. 63/2008.
5. Applicability of Public Notice No. 92/2009.

Issue-wise Detailed Analysis:

1. Confiscation of goods under Section 111(d) of the Customs Act, 1962:
The Commissioner of Customs (Import), Nhava Sheva, ordered the confiscation of the goods under Section 111(d) of the Customs Act, 1962, but allowed the importer to redeem the goods on payment of a redemption fine of ?13,00,000. The goods were classified as "MS Plates in various thickness and various sizes (stock lot)" under CTH 720852390. The revenue contended that the goods were misdeclared and restricted as per Notification No. 63/2008, making them liable for confiscation.

2. Imposition of penalty under Section 112(a) of the Customs Act, 1962:
A penalty of ?5,00,000 was imposed on the importer under Section 112(a) of the Customs Act, 1962. The revenue argued that the importer failed to submit the required MTC, which was a condition for importing steel products, and thus camouflaged the actual description of the goods. The Commissioner upheld the penalty, citing the violation of the Foreign Trade Policy 2004-2009.

3. Non-production of Mill Test Certificate (MTC):
The importer did not produce the MTC, which was mandated by Public Notice No. 92/2009. The Commissioner acknowledged that while the goods were of prime quality, the failure to produce the MTC rendered the goods liable for confiscation. However, the Public Notice itself provided that in the absence of MTC, the goods should be considered as secondary and assessed accordingly, not necessarily leading to confiscation.

4. Classification of goods as restricted under Notification No. 63/2008:
The goods were initially considered restricted under Notification No. 63/2008, which required compliance with certain conditions. However, the Licensing Note 3 of the Foreign Trade Policy allowed the import of prime steel items freely if the CIF value was above a specified threshold. The declared CIF value of the goods was US $425 per tonne, which was above the threshold, making them freely importable. The Commissioner’s finding that the goods were prime contradicted the classification as restricted.

5. Applicability of Public Notice No. 92/2009:
Public Notice No. 92/2009 outlined the requirement for MTC for the assessment of steel products. The Commissioner’s order was criticized for being non-speaking and not considering the submissions and applicable laws. The Public Notice directed that in the absence of MTC, goods should be assessed as secondary, not leading to confiscation. The Commissioner’s acknowledgment of the goods as prime negated the need for MTC for classification purposes.

Conclusion:
The appeal was allowed, and the impugned order was set aside. The Commissioner’s order was found to be non-speaking and not in accordance with the submissions and relevant laws. The goods were determined to be freely importable under Licensing Note 3, given their prime quality and CIF value. The confiscation and penalty imposed were deemed unsustainable. The judgment emphasized the need for a detailed and reasoned order considering all legal provisions and submissions.