2024 (6) TMI 258 - AT - Customs

Benefit of N/N. 32/97- Cus dated 01.04.1997 denied - clearance of imported goods declared as multi-colour granite block - benefit denied on the ground that the items were not acquired free of cost - whether the remand order passed by the Commissioner (Appeals) directing the adjudicating authority to recover the duty in respect of the goods imported vide two Bills of Entry dated 08.04.2011 and 09.12.2011 is legal and proper? - Direction to order confiscation of the goods imported. Denial of benefit of notification - demand of duty - HELD THAT - The goods imported by the Appellant have been exported after completion of job work. The appellant imported rough granite and converted them into monuments or flower vases etc. The Commissioner (Appeals) in page 5 of the impugned order has observed that the appellant has informed that the goods have already been exported. The appellant had submitted before Commissioner (Appeals) that the exports can be correlated with the Bills of Entry and that the same can be verified by the department - It is clear that goods which were imported have subjected to job work and exported. The Ld. Counsel has admitted that appellant is not eligible for Notification No.32/97. Even though appellant is not eligible for the notification the duty demand cannot sustain as the goods have already been exported. The direction of the Commissioner (Appeals) to demand duty on import cannot sustain and requires to be set aside. Ordered accordingly. Direction to order confiscation of the goods imported - HELD THAT - The goods are not available for confiscation and for this reason it is not legal and proper to order confiscation and impose redemption fine or penalty. The Hon ble Supreme Court in the case of SANKAR PANDI VERSUS UNION OF INDIA 2001 (12) TMI 83 - MADRAS HIGH COURT has upheld the decision of the Jurisdictional Hon ble High Court that when goods have been re-exported and are not available before the officer the same cannot be confiscated. The order for confiscation passed by the Commissioner (Appeals) cannot sustain - The order passed by the adjudicating authority having attained finality on the issue of this penalty imposed the said penalty requires to be sustained. The impugned order is set aside - the order passed by the original authority is restored - appeal allowed.

Summary

Issues:
1. Eligibility for benefit of Notification No. 32/97-Cus.
2. Confiscation of goods imported.
3. Recovery of duty on imports.
4. Imposition of penalty under Section 112(a) of the Customs Act, 1962.

Analysis:

Eligibility for benefit of Notification No. 32/97-Cus:
The appellant imported rough granite blocks without the required license from the DGFT and purchased them from a foreign supplier, contrary to the conditions of Notification No. 32/97. The original authority allowed the benefit initially but imposed a penalty under Section 112(a) of the Customs Act, 1962. The Commissioner (Appeals) reversed this decision, holding the appellant ineligible for the notification. The appellant conceded their ineligibility due to not importing goods free of cost. The Tribunal agreed and set aside the Commissioner's decision, noting that duty demand cannot be sustained as the goods were exported after job work.

Confiscation of goods imported:
The Commissioner (Appeals) directed confiscation of goods imported, but the Tribunal found this improper as the goods had already been exported after job work. Referring to legal precedent, the Tribunal held that when goods are re-exported and unavailable, confiscation is not valid. The order for confiscation was set aside, emphasizing that the goods' unavailability precludes confiscation.

Recovery of duty on imports:
The Commissioner (Appeals) ordered the recovery of duty on imports made on two Bills of Entry. However, the Tribunal found this direction unsustainable as the goods had been exported post-import. The Tribunal set aside the order, emphasizing that duty recovery was not viable due to the goods' exportation.

Imposition of penalty under Section 112(a) of the Customs Act, 1962:
The original authority had imposed a penalty of Rs.25,000 under Section 112(a) for the appellant's lack of license during a previous import. The Tribunal upheld this penalty, noting that the appellant did not appeal against it, and it had attained finality. The penalty was deemed appropriate and sustained by the Tribunal.

In conclusion, the Tribunal allowed the appeal, setting aside the Commissioner (Appeals) order and restoring the original authority's decision. The penalty under Section 112(a) was upheld, while directions for duty recovery and confiscation of goods were deemed unsustainable due to the goods' exportation post-import.