2019 (1) TMI 334 - HC - Customs

Export of prohibited item or not - proportion of non-basmati rice in export being in excess of 20% - prohibition in terms of Notification No.67 dated 23.1.2003 issued under rule 11 of the Export (Quality Control and Inspection) Act, 1963 - Held that - The appeal is admitted on substantial questions of law.

Summary

Issues involved:
1. Tribunal's reliance on Delhi High Court decision and subsequent review.
2. Tribunal's reliance on Notification No.67 dated 23.1.2003.
3. Application of principles from the Supreme Court decision in Prince Khadi Woollen Handloom Prod. Coop. Indl. Society v. CCE, 1996.
4. Questions of law regarding justification of confiscation, redemption fine, and penalties under Customs Act, 1962.
5. Questions of law regarding justification of reliance on Notification No.67 dated 23.1.2003.

Analysis:

1. The advocate for the appellant argued that the Tribunal's decision was based on a previous ruling of the Delhi High Court in the case of Commissioner of Customs v. Orion Enterprises, which was later reviewed in favor of the assessee. Therefore, the Tribunal was justified in not rectifying its order based on the earlier decision. Additionally, it was pointed out that the Tribunal relied on Notification No.67 dated 23.1.2003 under the Export (Quality Control and Inspection) Act, 1963, to confirm the confiscation and penalty under section 114(1) of the Customs Act, 1962.

2. Reference was made to the Supreme Court decision in Prince Khadi Woollen Handloom Prod. Coop. Indl. Society v. CCE, 1996, emphasizing that if the revenue claims the appellants are not entitled to a specific notification's benefit, a show cause notice must be issued. In this case, it was argued that since the revenue did not assert the applicability of the notification to the assessee, the Tribunal erred in relying on it without giving the appellant an opportunity to respond.

3. Considering the arguments presented by the appellant's advocate, the court admitted the case for further consideration.

4. The court identified two substantial questions of law for consideration:
- Whether the Tribunal was justified in upholding confiscation and imposing penalties under sections 114(1) and 114AA of the Customs Act, 1962.
- Whether the Tribunal was justified in relying on Notification No.67 dated 23.1.2003, which was not specified as a restriction under a relevant notification issued by the DGFT.

5. The proposed Question (c) was included in the first substantial question regarding the Tribunal's actions under the Customs Act, 1962.