2013 (5) TMI 271 - AT - Customs

Validity of import licence - Commissioner held that DGFT has no powers to issue import licence to validate as imports made in past and as such, the import licence is invalid - appellant are engaged in the business of distribution of Satellite channels in India imported de-coders of model CDE 2002 -BMAC not sure as to be freely importable or required licence wrote DGFT for clarification - Held that - Though in terms of para 4.13 of the relevant foreign trade policy, if any question, or doubt arises in respect of the interpretation of any provision contained in this policy or regarding classification of any item in the ITC (HS) hand book vol. 1 and Handbook (Vol.2), the said question or doubt shall be referred to the DGFT whose decision thereon shall be final and binding. Thus irrespective of the merits of the department s view point, once the import licence has been issued by DGFT specifically covering the goods imported by the appellant, the customs department cannot challenge the DGFT s power to issue the licence and hold the licence as invalid, as Exim Policy specifically provides that the goods already shipped or arrived in advance but not cleared from the customs, may also be cleared against import licence issued subsequently. In this case, the goods had been allowed to be cleared against ITC bond and bank guarantee and once import licence has been issued specifically covering the goods imported, the bond and bank guarantee have to be released un-conditionally. The impugned order, therefore, is contrary to the provisions of the law and is absurd. The same is, therefore, set aside. The appeal filed by the appellant is allowed with consequential relief. As regards the Revenue s appeal, since the confiscation of the goods is not sustainable, there is no merit in the same and hence the same is dismissed.

Summary

Issues:
1. Classification of imported goods under Heading No. 8528 or 8529.
2. Requirement of import license for the imported goods.
3. Validity of import license issued by DGFT.
4. Confiscation of goods and imposition of penalty.

Classification of Imported Goods:
The appellant imported decoders and claimed they should be classified under Heading No. 8529, while the department classified them under Heading No. 8528. The dispute arose as the department required an import license for goods under Heading 8528. Despite paying duty and providing a bank guarantee, the department issued a show cause notice for unauthorized import. The Commissioner upheld the unauthorized import, leading to multiple rounds of appeals and remands by the Tribunal.

Requirement of Import License:
The crux of the issue was whether an import license was necessary for the imported goods. The Commissioner consistently held the import to be unauthorized, leading to confiscation of goods and imposition of penalties. The Tribunal remanded the matter multiple times, considering the appellant's plea that no import license was required based on a previous judgment. The Commissioner, however, maintained that an import license was necessary as per the Apex Court's judgment.

Validity of Import License Issued by DGFT:
The appellant argued that the import license issued by DGFT specifically covered the imported goods and should be considered valid. The Commissioner, on the other hand, contended that DGFT lacked the authority to issue an import license for goods already imported. The Tribunal, after reviewing the submissions, found that once an import license was issued by DGFT covering the goods, the customs department could not challenge its validity. The Tribunal set aside the impugned order and allowed the appeal.

Confiscation of Goods and Imposition of Penalty:
The issue of confiscation of goods and imposition of penalties arose due to the dispute over the requirement of an import license. The Commissioner imposed penalties and ordered confiscation of goods, which led to further appeals and reviews. The Tribunal ultimately ruled in favor of the appellant, stating that once an import license specifically covered the goods, the confiscation was unsustainable. The Tribunal allowed the appeal and dismissed the Revenue's appeal against confiscation.

This detailed judgment revolves around the classification of imported goods, the necessity of an import license, the validity of the import license issued by DGFT, and the confiscation of goods with penalties. The Tribunal's decision highlighted the importance of honoring a valid import license issued by DGFT and set aside the Commissioner's order, ultimately allowing the appellant's appeal and dismissing the Revenue's appeal against confiscation.