2001 (10) TMI 229 - AT - Customs

Summary

Issues:
1. Confiscation of imported goods under Sec. 111(d) of the Customs Act, 1962.
2. Allegations of premature seizure and disposal of goods by Customs.
3. Requirement of Import and Export Code (IEC) number for clearance of goods.
4. Claim of goods as personal and household items or commercial goods.
5. Applicability of EXIM Policy for importation of goods.
6. Calculation of compensation based on cif value of imported goods.

Confiscation of Imported Goods under Sec. 111(d) of the Customs Act, 1962:
The case involved two separate consignments imported by different individuals, both seized by Customs under panchanama. The Commissioner held the goods liable for confiscation under Sec. 111(d) due to alleged contravention of the Act. However, the Tribunal found that the manner in which the case proceeded did not allow for the lawful importation to be established, nor did it provide scope for proving unlawful importation. Consequently, the Tribunal concluded that the orders of confiscation were not sustainable, and penalties were not justifiable.

Allegations of Premature Seizure and Disposal of Goods by Customs:
The Tribunal observed that the actions of seizure of the two consignments within about two weeks of their landing, and the subsequent actions taken under Sec. 111 were premature. The appellants consistently maintained their intention to file clearance documents, emphasizing that they had sufficient time available for the same. The Tribunal held that the provisions of the Customs Act did not mandate a 30-day period for filing Bills of Entry, and the actions taken by Customs were deemed premature.

Requirement of Import and Export Code (IEC) Number for Clearance of Goods:
The Commissioner contended that the importers were ineligible for clearance due to the absence of an Import and Export Code (IEC) number. However, the Tribunal noted that the relevant policy at the material time allowed for freely importable goods without such a code number being a hindrance. The Tribunal concluded that the lack of an IEC number should not have led to confiscation, especially considering the alleged undue haste by Customs.

Claim of Goods as Personal and Household Items or Commercial Goods:
The Commissioner denied the claim of importability as baggage based on the large quantity of goods and the importers' alleged intention to sell them for profit. The Tribunal noted that the goods were described as personal and household items in the Airway bill, but the Commissioner deemed them as not bona fide baggage due to the quantity and intended commercial use. The Tribunal emphasized the need for goods to qualify as bona fide household goods and personal effects to be considered importable as baggage.

Applicability of EXIM Policy for Importation of Goods:
The Tribunal analyzed the relevant provisions of the EXIM Policy, specifically Paragraphs 5.1, 4.1, and 5.6, to determine the importability of the goods in question. The Tribunal found that all the goods imported were freely importable as per the Policy, emphasizing that the importers' lack of an IEC number should not have hindered clearance, especially considering the freely importable nature of the goods.

Calculation of Compensation Based on CIF Value of Imported Goods:
The Tribunal directed that the appellants be compensated based on the CIF value of the goods imported as shown in the panchanama. The Tribunal referred to previous judgments where the seizure value of goods was refunded, even if the realization value was less, highlighting the importance of compensating based on the CIF value rather than the sale value of the goods.

In conclusion, the Appellate Tribunal CEGAT, Mumbai, in a detailed analysis of the case involving the confiscation of imported goods, premature seizure, IEC number requirement, classification of goods, EXIM Policy applicability, and compensation calculation, ruled in favor of the appellants. The Tribunal found that the confiscation orders were unsustainable, penalties were unjustifiable, and directed compensation based on the CIF value of the imported goods.