2024 (11) TMI 750 - AT - Customs

Re-export of the imported goods - Eligibility of relaxation from the security demanded in the provisional release order or otherwise - HELD THAT - We find that undisputedly, the appellant's imported goods are meant for warehousing in SEZ unit and the bills of entry were filed for warehousing of goods in the SEZ. The appellant have sought to re-export of these goods imported from abroad. In case of the of the imported goods into the SEZ and thereafter, re-export of the same is not subject to levy of any duties either custom duty or excise duty. Therefore, irrespective of any nature of alleged offence, if any, on the part of the appellant, will not involve any duty implication. On the identical fact where the goods were proposed to be re-exported, the redemption fine was set aside and penalty either was set aside or reduced to very minimal amount As decided in Regal Impex 2015 (10) TMI 2259 - CESTAT NEW DELHI and Lalkamal Enterprises, 2018 (2) TMI 657 - CESTAT CHENNAI in case of re-export of the goods the redemption fine was set aside and minimal amount of penalty was imposed. The case of the appellant is on better footing for the reason that in all the cases cited above are in respect of the DTA importer whereas, in the present case the goods were meant for warehousing in SEZ. The SEZ is governed by the SEZ Act along with Customs Act because any movement of the goods into and from SEZ is controlled by officers. Therefore, it cannot be expected that any person operating in the SEZ or warehousing in the SEZ can have malafide intention to evade duty. Therefore, in our considered view Bond for the total value of the goods is sufficient for releasing the seized goods for re-export thereof. As regard the judgments cited by the revenue, we find that none of the judgments is related to the SEZ unit or SEZ warehouse. Therefore, the ratio of those judgments is not applicable in the facts of the present case. Having observed above, we make it clear that the above observation is limited to the decision for provisional release of the goods that too only for re-export of the goods and the said observation shall not be used or influenced the adjudication of the case under show cause notice No. I/1358283/2023, DIN No.20230871MO000000D75F dt.18.08.2023. Appellant is allowed to re-export the goods only on execution of Bond for the value of the goods without any bank guarantee or any other security. The appeal is allowed in the above terms.

Summary

Issues Involved:

1. Mis-declaration of imported goods.
2. Confiscation and seizure of goods under Customs Act, 1962.
3. Requirement of authorization for restricted goods.
4. Conditions for provisional release of goods for re-export.
5. Imposition of redemption fine and penalties.

Detailed Analysis:

1. Mis-declaration of Imported Goods:

The appellant imported goods declared as "Printed Circuit Board" (PCB) and filed 41 bills of entry for warehousing at SEZ Mundra. Upon examination by DGRI officers, discrepancies were found in the declared quantity and condition of the goods. The actual quantity was less than declared, and many PCBs were old, used, or marked as rejected. The appellant allegedly mis-declared the goods' description and value, leading to the conclusion that the goods were liable to confiscation under Section 111(m) of the Customs Act, 1962.

2. Confiscation and Seizure of Goods under Customs Act, 1962:

The goods were seized under Section 110(1) of the Customs Act, 1962, due to mis-declaration and lack of required authorization. The estimated value of the goods was significantly lower than declared, suggesting an attempt to evade accurate duty assessment. Consequently, a show cause notice was issued to the appellant and other parties involved, questioning the legality of the importation and subsequent warehousing of the goods.

3. Requirement of Authorization for Restricted Goods:

The goods appeared to be restricted and required authorization from the DGFT as per Notification No.05/2015-2020. The appellant failed to provide such authorization, making the goods valued at Rs.9,21,28,811/- liable to confiscation under Section 111(d) of the Customs Act, 1962. This non-compliance with import regulations further justified the seizure and proposed penalties.

4. Conditions for Provisional Release of Goods for Re-export:

The appellant requested permission to re-export the goods, arguing that since the goods were warehoused in SEZ, there was no duty implication. The Assistant Commissioner allowed provisional release for re-export, subject to a bond for the full value and a bank guarantee. However, the appellant contested the requirement for a bank guarantee, citing that the goods were meant for re-export, and thus no revenue interest was involved. The Tribunal found that since the goods were for SEZ warehousing and re-export, the demand for a bank guarantee was unjustified, allowing re-export on a bond without additional security.

5. Imposition of Redemption Fine and Penalties:

The appellant argued against the imposition of redemption fine and penalties, as the goods were intended for re-export. Citing precedents, the Tribunal noted that in cases where goods are re-exported, redemption fines are typically set aside, and penalties are minimized. The Tribunal emphasized that the SEZ context, governed by specific regulations, further mitigated the need for stringent financial penalties, allowing re-export with only a bond for the goods' value.

Conclusion:

The Tribunal concluded that the appellant could re-export the goods upon executing a bond for the goods' value without any bank guarantee or additional security. This decision was based on the understanding that the goods were warehoused in an SEZ and intended for re-export, thus not affecting revenue interests. The appeal was allowed in these terms, with the Tribunal's observations limited to the provisional release decision and not influencing the ongoing adjudication of the case.