2000 (5) TMI 139 - AT - Customs

Summary

Issues:
1. Importation of goods under restrictive list without a valid license.
2. Confiscation of goods under Section 111(d) of the Customs Act, 1962.
3. Imposition of redemption fine and penalty under Section 112(a) of the Customs Act, 1962.
4. Consideration of the importer being a public sector undertaking and an actual user.
5. Justification for setting aside the penalty imposed by the Commissioner.

Analysis:

Issue 1: Importation of goods under restrictive list without a valid license
The case involved the importation of a complete Excavator along with Spare Parts under a Bill of Entry without a valid Special Import License. The goods were initially under Open General License (O.G.L.) but were later included in the list of restrictive items. The Tribunal noted that the importer finalized the orders when imports were not restricted, and the item was removed from the restricted list upon arrival at the Port of Calcutta. It was observed that there was no deliberate attempt to contravene Import Trade Control Regulations.

Issue 2: Confiscation of goods under Section 111(d) of the Customs Act, 1962
The Commissioner had ordered the confiscation of the goods under Section 111(d) of the Customs Act, 1962, as the goods were considered to be imported without a valid license. However, the Tribunal found that the confiscation based on the goods being in the restrictive list only at the time of shipment was a technical breach. Therefore, the Tribunal held that the confiscation required redemption only through a token fine of Re. 1.00.

Issue 3: Imposition of redemption fine and penalty under Section 112(a) of the Customs Act, 1962
The Commissioner had imposed a Redemption Fine of Rs. 10.00 lakh and a penalty of Rs. 1.00 lakh under Section 112(a) of the Customs Act, 1962. The Tribunal, considering the nature of the breach and the importer being a public sector undertaking, set aside the penalty in full. It relied on various legal precedents to support its decision, emphasizing that penalties should not be imposed for technical or venial breaches.

Issue 4: Consideration of the importer being a public sector undertaking and an actual user
The Tribunal took into account that the importer was a public sector undertaking and an actual user. It noted that the importer had a bona fide belief that the goods were imported freely, and the restriction on imports was removed by the Director General of Foreign Trade upon the goods' arrival at the Port of Calcutta.

Issue 5: Justification for setting aside the penalty imposed by the Commissioner
The Tribunal found that the Commissioner had not provided sufficient reasoning for considering the goods as restricted when they were initially under O.G.L. and subsequently removed from the restrictive list by a Public Notice issued by the DGFT. Citing legal authorities, the Tribunal set aside the penalty, emphasizing that penalties should not be imposed unless there is deliberate defiance of the law or contumacious conduct.

In conclusion, the Tribunal allowed the appeal, setting aside the penalty imposed by the Commissioner and requiring only a token fine for the technical breach of importing goods under a restrictive list without a valid license.