2018 (7) TMI 1300 - AT - Customs

Import of certain pesticides - insecticide, Chlorpropham - prohibited goods or not? - whether the goods imported vide the above Bill of Entry are liable for confiscation under Section 111(o) of the Customs Act, 1962? - Held that - For the import of the pesticide- Chlorpropham, as per Section 9 (3) of the Insecticide Act 1968 read with the Rules, the condition specified is that the item is allowed for import only from the specified source named in the United Kingdom and if the import is made through designated port such as JNPT Navi Mumbai. It is note worthy that ICTD Pithampur, through which the appellant had imported the item is not one of the ports specified for such import - The importer is also required to register himself with the Designated Authorities under the Insecticides Act ibid. The appellant s registration certificate dated 30/06/2008 was not valid at the time of import. Further the goods have been imported from China as against the designated source in UK. The import has also been done through a port which is not notified for permissible imports. In view of the above facts, it is established that the import of pesticides made by the appellant is in contravention of the conditions specified under the Insecticides Act Rules for import of such goods. Consequently, the imported goods are liable for confiscation in terms of Section 111 (o) of the Customs Act, 1962. Considering the nature of the goods, the goods should not be allowed to be redeemed. Penalty u/s 112 (a) of CA - Held that - Section 112 provides for imposition of penalty for improper importation of goods upto an amount not exceeding the value of the goods or ₹ 5000/- whichever is greater. The value of goods as assessed in bill of entry is ₹ 19.4 Lakh. Consequently, the penalty imposed is beyond the statutory limit - the penalty reduced from ₹ 25 Lakh to ₹ 15 Lakh. Appeal allowed in part.

Summary

Issues:
- Import of insecticides in contravention of the Insecticides Act, 1968 and Insecticides Rules, 1971.
- Confiscation of imported goods and imposition of penalty.
- Applicability of registration requirements under the Insecticides Act.
- Proper imposition of penalty under Section 112.

Analysis:
1. Import Contravention Issue:
The appellant imported insecticides for further manufacture and export, not for use in India. The Department alleged irregular import under the Insecticides Act. The Tribunal's decision in a similar case was cited to support the argument that import for indigenous manufacture is exempt from registration requirements. The appellant contended that the goods were wrongly considered prohibited, requesting redemption instead of absolute confiscation due to the low value of goods.

2. Registration Requirement Issue:
The Department argued that the import was not from an approved source and the appellant falsely declared the goods as not prohibited. The appellant's registration was invalid at the time of import, and the goods were imported from China, not the specified UK source. The import was through an unauthorized port, violating the Insecticides Act and Rules.

3. Confiscation and Penalty Issue:
The Tribunal found the import contravened the Act and Rules, justifying confiscation under Section 111(o) of the Customs Act. The appellant's plea that the goods were not prohibited was refuted, distinguishing the case from previous Tribunal decisions. The penalty imposed exceeded the statutory limit based on the goods' value, leading to a reduction from ?25 lakh to ?15 lakh. The impugned order was upheld with this modification.

In conclusion, the Tribunal upheld the confiscation of the imported goods due to the contravention of registration requirements and improper importation under the Insecticides Act. The penalty was reduced but still imposed within statutory limits. The judgment clarified the distinction between import for use in India and for further manufacture, emphasizing compliance with registration and import conditions under the Act and Rules.