2015 (12) TMI 431 - AT - Customs

Import of new radial tyres on a date after 24.11.2008 when imports of such tyres were restricted by DGFT in terms of Notification No. 64(RE)/20082004-2009 dated 24.11.2008 - Confiscation of goods - Imposition of redemption fine and penalty - Held that - There was a proforma invoice of 13-10-2008 in response to which part payment of US .14,300/- was sent on 18.11.2008 which was prior to the imposition of restriction on 24.11.2008. Thus there is certainly substantial force in the contention of the ld. Consultant that all this amounts to concrete steps taken prior to 24.11.2008 for the import of the impugned goods because the appellant would not have been in a position to back out without the risk of losing money. In these set of circumstances, we agree with the appellant that making part payment against a proforma invoice would constitute concrete steps for import of impugned goods and as these steps were taken prior to 24.11.2008, the ratio of CESTAT judgement in the case of P.T. Impex Pvt. Ltd. (2015 (4) TMI 642 - PUNJAB & HARYANA HIGH COURT) would be applicable. - Redemption fine and penalty is set aside - Decided in favour of assessee.

Summary

Issues:
Appeal against redemption fine and penalty imposed for importing restricted goods without a license.

Analysis:
The appeal was filed challenging the order-in-appeal that upheld a redemption fine and penalty on the appellant for importing new radial tyres after the restriction imposed by DGFT on 24.11.2008. The Commissioner (Appeals) found the appellant liable under Section 111(d) of the Customs Act, 1962. The appellant argued that it had taken concrete steps for import prior to the restriction, citing judgments supporting its position. The Revenue contended that no contract or letter of credit existed before the restriction, making the impugned order valid.

Upon considering both arguments, the Tribunal noted that while there was no formal agreement before 24.11.2008, the appellant had made a part payment against a proforma invoice dated 13-10-2008, before the restriction was imposed. The Tribunal agreed with the appellant that this constituted concrete steps for import, as backing out would have led to financial loss. Citing a CESTAT judgment, the Tribunal emphasized that the existence of a concluded contract could be inferred from circumstances even without an irrevocable letter of credit.

The Tribunal referred to the judgment in the case of P.T. Impex Pvt. Ltd. and the decision of the Punjab & Haryana High Court, which supported the appellant's position. It highlighted the principle that if an importer entered into a contract in good faith when goods were freely importable, without foreseeing restrictive changes, there is no justification for imposing a redemption fine. Consequently, the Tribunal set aside the redemption fine and penalty, allowing the appeal.