1998 (10) TMI 163 - AT - Customs

Summary

Issues:
1. Legality and propriety of adjudication orders passed by the Additional Commissioner of Customs, Mumbai.
2. Confiscation of goods under Section 111(d) of the Customs Act.
3. Validity of import and adjudication timing.

Analysis:

1. The Commissioner of Customs, Mumbai filed appeals challenging the adjudication orders passed by the Additional Commissioner of Customs, Mumbai. The goods involved were low carbon mild steel defective sheets imported by the respondents, who claimed to be actual users but admitted importing canalised items mistakenly. The Additional Commissioner confiscated the goods with an option to redeem on payment of a fine. Subsequently, it was discovered that the import was not legal, leading to the appeal to determine the legality and propriety of the adjudication orders.

2. The key argument raised was the premature confiscation of goods before they were physically imported into India. The Department argued that the goods were not available for confiscation as they had not entered Indian waters or become imported goods as defined by the Customs Act. The respondents contended that the validity of import could be determined before the goods entered Indian waters, citing a handbook provision. However, the Tribunal found that the goods were not physically present in India when the adjudication orders were issued, rendering the confiscation invalid. The orders were deemed void ab initio, requiring a fresh adjudication in accordance with the law.

3. The timing of adjudication in relation to the import process was crucial. The Import General Manifest was filed after the adjudication orders, indicating that the goods had not yet been imported when the confiscation was ordered. The Tribunal emphasized that for confiscation, goods must first become imported goods as defined by the Act. The argument that import validity is determined based on the date of shipment was dismissed as irrelevant to the case at hand. The Tribunal concluded that a de novo adjudication was necessary to address the issues of fine adequacy and penalty imposition, considering additional evidence not previously submitted.

In conclusion, the appeals were allowed, and the case was remanded for a fresh adjudication in accordance with the law, emphasizing the need for goods to be physically imported before confiscation can be ordered.