2023 (7) TMI 891 - AT - Customs

Import of insecticide without a valid licensee or directly from the manufacturer - importer has not registered their goods with CIB RC as prescribed in the manner - Option to given to re-export the goods - Redemption fine - penalty - import of Cartap Hydrochloride Technical 98% - Paraquat Diochloride 42 % Technical - prohibited goods or not - HELD THAT - The goods have been ordered for re-export. The appellant is not contesting the order directing to re-export. Appellant is contesting only the redemption fine and penalty imposed. In the appellant's own case 2017 (7) TMI 519 - CESTAT CHENNAI on the very same issue and import of identical goods, the Tribunal set aside the redemption fine and penalties. Thus, it can be seen that the import was also made from manufacturer viz., M/s. Liyang Chemical Factory, China. The Hon'ble Apex Court in the case of Siemens Limmited Vs. Collector of Custom 1999 (8) TMI 84 - SUPREME COURT held that no redemption fine can be imposed when the goods are re-exported. The redemption fine and penalties imposed require to be set aside - impugned order is modified to the extent of setting aside the redemption fine and penalties imposed without disturbing the order of confiscation and direction to re-export. The appeal is partly allowed.

Summary

Issues Involved:
1. Confiscation of goods under Section 111(d) of the Customs Act, 1962.
2. Imposition of redemption fine under Section 125 of the Customs Act, 1962.
3. Imposition of penalty under Section 112(a) of the Customs Act, 1962.
4. Compliance with the Insecticides Act, 1968.

Summary:

1. Confiscation of Goods:
The original authority ordered the confiscation of goods under Section 111(d) of the Customs Act, 1962, read with Section 17 of the Insecticides Act, 1968. The goods were deemed misbranded as they were not registered with the Central Insecticides Board & Registration Committee (CIB & RC) as required by law.

2. Imposition of Redemption Fine:
The appellant was given the option to redeem the goods for re-export upon payment of a redemption fine under Section 125 of the Customs Act, 1962. The appellant contested this, arguing that the goods were imported from authorized distributors and not directly from the manufacturer, which they claimed was a technical breach.

3. Imposition of Penalty:
A penalty was imposed under Section 112(a) of the Customs Act, 1962, for rendering the goods liable for confiscation. The appellant argued that similar penalties had been set aside in their previous cases, citing [2018 (359) ELT 239 (Tri. Chennai)].

4. Compliance with the Insecticides Act:
The appellant argued that the goods were imported from authorized distributors of the manufacturers, which should be considered substantial compliance with the Insecticides Act, 1968. The Tribunal found that the goods were indeed manufactured by the companies mentioned in the registration certificates and supplied through authorized distributors, thus satisfying the primary condition of the registration.

Tribunal's Findings:
- The Tribunal noted that the primary condition of the registration certificate was satisfied as the goods were manufactured by the listed companies and supplied through their authorized distributors.
- The Tribunal referenced previous decisions, including Siemens Ltd. Vs. Collector [1999 (113) ELT 776 (SC)] and Union of India Vs. Sankar Pandi [2018 (360) ELT A 214 (SC)], which held that no redemption fine should be imposed if the goods are re-exported.
- The Tribunal concluded that the breach was technical and did not justify the imposition of redemption fine and penalty.

Decision:
The Tribunal set aside the redemption fine and penalties imposed, without disturbing the order of confiscation and direction to re-export. The appeal was partly allowed in these terms.

(Order pronounced in open court on 20.07.2023)