1989 (10) TMI 171 - AT - Customs

Summary

Issues Involved:
1. Whether the imported almonds in shell qualify as "seeds" under the import licence.
2. Applicability of the Import Control Order and the Customs Tariff Act to the classification of almonds.
3. Validity of the redemption fine and personal penalty imposed by the Collector of Customs.

Detailed Analysis:

1. Whether the imported almonds in shell qualify as "seeds" under the import licence:
The appellants imported 2200 bags of Soft Shell Almonds and claimed clearance under an REP import licence for "seeds." The Collector of Customs found that the almonds were consumer goods and not seeds, thus not importable under the said licence. The appellants argued that the almonds were capable of germination and should be classified as seeds. However, the Collector relied on the decision in M/s. MM Exports v. Collector of Customs, which held that almonds in shell are not permissible as seeds. The Tribunal upheld this view, stating that almonds are classified as "Edible fruits and nuts" under Chapter 8 of the Customs Tariff Act, and not as seeds under Chapter 12. The Tribunal emphasized that mere capacity to germinate does not classify an item as seeds for import purposes.

2. Applicability of the Import Control Order and the Customs Tariff Act to the classification of almonds:
The Tribunal examined whether the almonds in shell could be classified as seeds under the Import Control Order and the Customs Tariff Act. The Import Control Order mandates that the description of goods in the licence must conform to the description in Schedule I of the Order, which corresponds to the Customs Tariff Act. Under Chapter 8 of the Customs Tariff Act, almonds are classified as "other nuts, fresh or dried, whether or not shelled or peeled," and not as seeds. The Tribunal also referred to the Explanatory Notes of the CCCN, which exclude almonds from the category of seeds. The Tribunal concluded that almonds in shell are not importable as seeds under the licence.

3. Validity of the redemption fine and personal penalty imposed by the Collector of Customs:
The Collector imposed a redemption fine of Rs. 18.00 lacs and a personal penalty of Rs. 2.00 lacs on the appellants. The Tribunal confirmed the confiscation of the consignment, stating that the customs authorities acted within their jurisdiction to examine the permissibility of the imported item under the licence. The Tribunal found no grounds to interfere with the redemption fine, noting that the margin of profit for the imported consignment justified the fine. The Tribunal also upheld the personal penalty, concluding that the appellants' importation of such a large quantity of almonds was not bona fide and that they were likely aware of the prevailing legal view against such imports. The appeal was dismissed, and the order of the Collector was confirmed.

Conclusion:
The Tribunal confirmed the Collector's order, holding that the imported almonds in shell do not qualify as seeds under the import licence, and upheld the confiscation, redemption fine, and personal penalty imposed by the Collector of Customs.