1998 (1) TMI 271 - AT - Customs

Summary

Issues:
1. Appeal against orders passed by the Commissioner (Appeals) reducing redemption fine.
2. Interpretation of Notification No. 9 (RE-96)/92-97 regarding import policy.
3. Ambiguities in classification and clarification provided by Ministry of Commerce.
4. Prospective or retrospective application of the clarification.
5. Validity of confiscation of goods and reduction of redemption fine.

Analysis:
The appeal was filed against the Commissioner (Appeals) orders reducing the redemption fine to Rs. 85,000. The appellant's consultant argued based on Notification No. 9 (RE-96)/92-97, which amended the ITC (HS) classification of export and import items, allowing certain goods to be freely importable for specific use as components/spares in various equipment. The consultant relied on a circular issued by the Ministry of Commerce clarifying the policy change due to rationalization, emphasizing that it did not alter the existing policy but aimed to rectify ambiguities and errors in classification.

The Ministry's circular highlighted that the rationalization exercise did not change the policy but aimed to reconcile and clarify the import policy for specific items listed in the notification. The circular explicitly stated that it was prospective in nature, extending the provisions to consignments already shipped but not cleared by Customs Authorities. The judge noted that the circular did not mention retrospective application, indicating its prospective nature. Consequently, the argument for retrospective application by the consultant was rejected, upholding the proper confiscation of goods. However, considering the circumstances, the redemption fine was further reduced to Rs. 75,000, modifying the initial order.

In conclusion, the judgment dismissed the appeal while affirming the validity of the confiscation of goods based on the prospective application of the clarification provided by the Ministry of Commerce. The reduction of the redemption fine to Rs. 75,000 was the only modification made to the Commissioner (Appeals) orders.