2023 (11) TMI 838 - AT - Customs

Levy of Redemption fine while ordering re-export of the imported Titanium Powder - restricted goods or prohibited goods - HELD THAT - What the original authority has missed is the application addressed to the DGFT, though belatedly, which only shows the bona fides of the appellant. When pointed out as to the requirement of licence, the appellant appears to have immediately made an application and there are no disputes that the said application is still pending with the DGFT and no order has yet been made on the said application. The interests of justice would demand that the matter be remanded to the file of the adjudicating authority awaiting the response from the DGFT on the application made by the appellant and then, pass an appropriate speaking order based on any such communication from the DGFT on the application for import authorization of the restricted items made by the appellant - Appeal allowed by way of remand.

Summary

Issues involved:
The appeal challenges the confiscation of Titanium Powder under Section 111(d) of the Customs Act, 1962 due to lack of DGFT import license, and the imposition of redemption fine and penalty under Sections 125(1) and 112(a)(i) respectively. The main issue is whether the authorities were correct in imposing redemption fine for re-export of the imported Titanium Powder.

Confiscation of Titanium Powder:
The appellant imported goods including Titanium Powder without the required DGFT license, leading to confiscation under Section 111(d) of the Customs Act, 1962. The original authority ordered confiscation but allowed redemption under Section 125(1) for re-export upon payment of a fine of Rs.15,000 along with a penalty under Section 112(a)(i).

Appeal and Arguments:
The appellant contended that Titanium Powder is a restricted, not prohibited, item under the Customs Act. They highlighted that an application for import authorization of Titanium Powder was submitted to the DGFT, pending approval. Citing legal precedents, the appellant argued that the lower authorities erred in treating the item as prohibited and ordering confiscation.

Defense and Counter-arguments:
The Deputy Commissioner defended the lower authorities' actions, stating that import of restricted items without a license is deemed prohibited under Section 3 of the Foreign Trade (Development and Regulation) Act. He referenced the first appellate authority's view that importing restricted goods without a license may be treated as prohibited.

Decision and Remand:
After considering the arguments, the Tribunal found that the matter should be remanded to the adjudicating authority. The Tribunal noted the appellant's application to the DGFT for import authorization, indicating good faith. The Tribunal emphasized awaiting the DGFT's response before passing a new order. The decision was based on the need for justice and adherence to legal distinctions between prohibited and restricted goods.

Conclusion:
The Tribunal set aside the impugned order and remanded the matter for a fresh decision based on the DGFT's response to the appellant's application. The adjudicating authority was instructed to consider the distinction between prohibited and restricted goods as per legal precedents. All contentions were left open, and the appeal was treated as allowed by way of remand.