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Issues:
- Appeal against the order of confiscation of Staple Pins imported under REP Licence for cotton garments under Export Product Group - C.I. - Interpretation of policy allowing 3% of total value of Export of Staple Pins for embellishment. - Conflict between established practice of Custom House and clarification from Chief Controller of Imports and Exports regarding the purpose of import. - Legal validity of confiscation upheld by Collector of Customs and Central Excise (Appeals). - Argument of appellants based on entering into a contract before clarification was issued and absence of Trade Notice. - Counter-argument by J.D.R. regarding limited permissible nature of Staple Pins and opinion of Chief Controller of Imports and Exports. - Examination of past practice, bona fide belief of importers, and absence of Trade Notice in determining legality of confiscation. - Comparison with Supreme Court decision in Akbar Baddruddin Jiwani v. Collector of Customs, Bombay. Detailed Analysis: The appellants filed an appeal against the order of confiscation of Staple Pins imported under REP Licence for cotton garments under Export Product Group - C.I. The Collector of Customs and Central Excise (Appeals) confirmed the confiscation order passed by the Deputy Collector. The conflict arose due to the interpretation of the policy allowing 3% of the total value of Export of Staple Pins for embellishment. The Custom House had a practice of allowing such consignments for clearance, but a clarification from the Chief Controller of Imports and Exports stated that the import was only permissible for decorative purposes. The Collector of Customs and Central Excise (Appeals) upheld the confiscation despite acknowledging that the appellants had entered into a contract before the clarification was issued. The appellants argued that they had acted in good faith based on the regular practice of the Custom House and the absence of a Trade Notice regarding the change in import policy. They relied on a specific decision to support their contention. On the other hand, the J.D.R. argued that Staple Pins fell under a limited permissible category and referred to the Handbook and the opinion of the Chief Controller of Imports and Exports. The J.D.R. emphasized that the Chief Controller's opinion deemed the goods not permissible for import based on their use for embellishment. The J.D.R. also highlighted the definition of embellishment and cited a Tribunal decision in support. The judgment considered the submissions of both parties and concluded that the appellants had entered into the contract before seeking clarification in good faith. The absence of a Trade Notice regarding the change in import policy and the past practice of allowing such imports supported the appellants' position. The judgment referenced a Supreme Court decision to establish the principle that confiscation is not valid when importers act in good faith under a bona fide belief. Therefore, the appeal was allowed, the confiscation order was set aside, and the appellants were entitled to consequential benefits.
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