2019 (4) TMI 1050 - AT - Customs

Import of prohibited goods - parts of electric iron - case of Revenue is that the appellant imported Euroline brand of electric iron , comprising the main component and certain other parts, excluding power supply and base , in the impugned transaction and the excluded parts were imported separately with intent to evade compliance with the norms of the Bureau of Indian Standards - HELD THAT - It is on record that the impugned goods, upon examination and not by the mere reliance on legal fiction in the interpretative rules, were found to be the most vital component of electric iron and that the goods were so packed as to easily integrate the other two parts which, admittedly, had been imported separately but concurrently, to support the finding that the goods are, indeed, electric iron. Indubitably, the prescriptions of Bureau of Indian Standards, made available by Learned Consultant, applies to the finished product and not to the parts but the most essential component that is impugned in this dispute, if allowed to remain non-compliant, would not be conducive to public safety. As the imported goods, though required to be, are not compliant with the standards, they fail to overcome the bar of prohibition at the threshold. Hence the question of duty liability, differential or otherwise, will not arise. Penalty under section 112 of Customs Act, 1962 - HELD THAT - The goods were imported for sale in India but were ordered to be re-exported. Penalty is an instrument of deterrence. Re-export is not without any financial consequence to the importer. That should be sufficient deterrent against such imports - Penalty set aside. The impugned order is modified and the detriment limited to that of re-export of the said goods without having to redeem the goods and without being penalised - appeal disposed off.

Summary

Issues:
Confiscation and conditions imposed on redemption of goods based on application of Bureau of Indian Standards norms for 'electric irons' to 'parts of electric iron'.

Analysis:
1. The appellant, M/s Global Enterprises, contested the confiscation and conditions imposed by the adjudicating authority regarding the import of 'parts of electric iron' against the application of standards for 'electric irons' by the Bureau of Indian Standards. The appellant argued that the imported goods could not be sold as 'electric irons' in the domestic market without certain essential components, contrary to the assessing officer's presumption of intent to evade standards under the Foreign Trade Policy.

2. The appellant's consultant cited legal precedents from the Hon'ble High Court of Punjab & Haryana, the Supreme Court, and the Tribunal to support the argument that the impugned order was not legally sound. The consultant emphasized the distinction between parts and the whole product, as well as the exclusivity of determinations under import tariff and Foreign Trade Policy regulations.

3. The Revenue contended that the appellant imported 'electric iron' parts excluding essential components with the intent to avoid compliance with Bureau of Indian Standards norms, leading to the dispute.

4. The Tribunal examined the legal precedents cited by the appellant's consultant and found that they did not directly apply to the current case. The Tribunal emphasized the importance of proper examination of dutiability and the impossibility of attaching compliance conditions that cannot be met.

5. The Tribunal analyzed the distinction between parts and whole products concerning Bureau of Indian Standards norms. Despite the consultant's arguments, the Tribunal found that the imported goods, even if essential for 'electric irons,' must comply with safety standards to ensure public health. The Tribunal ruled that the goods were liable for confiscation due to non-compliance with standards, ultimately ordering re-export.

6. Regarding duty liability and confiscation, the Tribunal aligned with the Supreme Court's stance that duty liability must be established before being demanded. Failure to comply with Bureau of Indian Standards norms rendered the goods liable for confiscation, leading to the decision for re-export to avoid financial burden on the Central Government.

7. The Tribunal addressed the penalty imposed under the Customs Act, emphasizing re-export as a sufficient deterrent against non-compliant imports, modifying the order to mandate re-export without redemption or additional penalties.

8. In conclusion, the Tribunal upheld the confiscation of goods due to non-compliance with safety standards, ordering re-export without redemption or penalties, thereby disposing of the appeal.