2017 (12) TMI 102 - AT - Customs

Confiscation of goods - scope of the term importer - mutilation of goods - Held that - these appeals can be disposed off on pure question of law as to who is importer. Undisputedly, appellant is a unit situated in SEZ area has cleared the goods from SEZ to DTA though he had filed Bills of Entry on behalf of the DTA unit, discharged duty liability on behalf of DTA unit as is mandated in. It is conceptually clear that clearance made from a SEZ to DTA are considered as imports for the DTA unit and the provisions of the Customs Act 1962 would apply in full force to such imports. In the case in hand, undoubtedly the goods got cleared from the SEZ unit of Anita exports and was examined in the DTA wherein some discrepancy were found out, if that be so, the importer of the said goods from DTA is required to discharge the duty, if any, is the law as it is not the case of the Revenue that the importers were non-existent. The appellant Anita Exports cannot be considered as an importer, in the facts and circumstances of this case. Accordingly, no duty liability arises and hence goods even if they are liable for confiscation no duty liability arises on the appellant herein. The case in hand, since the goods area mutilated goods and the appellant being held as not an importer, the appeals to the extent they contest the impugned order before this Tribunal are allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Demand of Customs Duty, confiscation of goods, redemption fine, and penalties for goods cleared to DTA from SEZ.
2. Interpretation of who is considered the importer in the case of goods cleared from SEZ to DTA.

Analysis:
1. The appeals were against the demand of Customs Duty, confiscation of goods, redemption fine, and penalties imposed on goods cleared from SEZ to DTA. The appellant, an SEZ unit, imported old used goods duty-free, processed them, and re-exported them. Goods unable to be processed were cleared to DTA after mutilation. Despite fulfilling SEZ Act provisions, the goods were intercepted in DTA, leading to reclassification, duty demands, and penalties. The appellant argued that duty liability cannot be passed to them as they filed Bills of Entry on behalf of the DTA unit. The lower authorities upheld the duty demands and penalties.

2. The key issue revolved around determining the importer when goods are cleared from SEZ to DTA. The appellant, although situated in SEZ, cleared goods to DTA and filed Bills of Entry on behalf of the DTA unit, fulfilling duty obligations. The Customs Act 1962 applies to such imports, and the importer is defined under Section 2(26) as the one who has to discharge duty after goods clearance. The appellant, not meeting the definition of importer, was not liable for duty. The examination report highlighted mutilation, as per Board Circular requirements, which the lower authorities misinterpreted. As the goods were mutilated and the appellant not considered an importer, the appeals were allowed, setting aside the impugned order.