2014 (3) TMI 285 - AT - Customs

Redemption Fine and penalty - import of Boric acid under DFIA scheme - Failure to produce import permit issued by the Central Insecticide Board and Registration Committee under the Ministry of Agriculture - Held that - As the condition no. 7 of the Notification 2/2006 has already been stuck down by the Hon ble Kerala High Court 2013 (8) TMI 100 - KERALA HIGH COURT ; furthermore, in the insecticides Act, 1968 provided exemption under for non-insecticidal purpose, therefore, the appellant are not required to obtain any permission from the Ministry of Agriculture. Accordingly, they are entitled for the benefit of Notification 2/2006 dated 07.04.2006 and entitled to get the benefit of the DFIA Scheme. - Decided in favor of assessee.

Summary

Issues: Appeal against confiscation of goods, redemption fine, demand of duty, penalty, interpretation of DGFT Notification, exemption under Section 38 of Insecticides Act, 1968, validity of import permit requirement, applicability of Notification 2/2006 dated 07.04.2006.

Analysis:
1. Confiscation of Goods and Redemption Fine:
The appellant appealed against an order confiscating goods and allowing redemption on a fine, with confirmed duty demand and penalties. The appellant imported Boric acid under the DFIA scheme but failed to produce the required import permit from the Central Insecticide Board and Registration Committee. The Commissioner (Appeals) reduced the fine and penalties but confirmed the rest of the order. The appellant argued that as the goods were for non-insecticidal use, no permission was needed as per Section 38 of the Insecticides Act, 1968. The Tribunal found that the condition in Notification 2/2006 had been invalidated by the Kerala High Court and that no permission was required for non-insecticidal purposes, thus setting aside the impugned order and allowing the appeal.

2. Interpretation of DGFT Notification and Exemption under Insecticides Act:
The appellant relied on the provisions of DGFT Notification 2/2006 dated 07.04.2006, which required an import permit for boric acid for non-insecticidal purposes. However, the appellant contended that under Section 38 of the Insecticides Act, 1968, an exemption existed for such imports for non-insecticidal use. The Tribunal agreed with the appellant's interpretation, noting that the Kerala High Court had invalidated a specific condition of the Notification and that no permission was necessary for non-insecticidal purposes. Therefore, the appellant was deemed entitled to the benefits of the DFIA Scheme under the Notification.

3. Validity of Import Permit Requirement:
The crux of the issue revolved around the necessity of obtaining an import permit for boric acid under the DFIA scheme. The appellant argued that since the goods were for non-insecticidal purposes, no permission was required as per Section 38 of the Insecticides Act, 1968. The Tribunal concurred with this argument, emphasizing that the Kerala High Court had already struck down a specific condition of the Notification, thereby negating the need for an import permit for non-insecticidal use.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal based on the exemption under the Insecticides Act, 1968 and the invalidated condition of the DGFT Notification. The decision highlighted the importance of legal interpretations and exemptions in determining the applicability of import requirements and schemes, ultimately providing relief to the appellant in this case.