2023 (12) TMI 794 - AT - Customs

Confiscation - redemption fine - penalty - import of musk melon dried seeds - restricted goods or not - precondition for resumption of title to the goods for re-export - HELD THAT - The goods, being agricultural products, are subject to conditions of import which, if diluted, may cause outcomes that may not be particularly palatable to the agricultural interests of the country. Accordingly, there are no reason to entertain the plea that the restriction should be ignored. The absence of authorization to import musk melon dried seeds draws the consequence of confiscation under section 111(d) of Customs Act, 1962. Instead of regularization, which is the aftermath of such confiscation and consequential fiscal restitution, the imported goods had been deemed as not fit for home consumption and, therefore, ordered to be re-exported. There are no reason to interfere with barring the entry of goods into the territory of India. It was on record that the amendment of the erstwhile policy on free import of the impugned goods was effected in April 2021 and the impugned goods had been shipped in the same year. It is quite possible that the appellant was in the dark about the changes in the policy and, considering that the goods have not been permitted for clearance for home consumption, it would be unjust to burden the goods with the detriments of redemption fine and imposition of penalty. While holding the goods liable for confiscation under section 111(d) of Customs Act, 1962 and, as the same are directed to be re-exported but for which the central government would be saddled with possession of such prohibited goods with no evidence of deliberate contravention of restriction, it is deemed appropriate to set aside the redemption fine. Likewise, the penalty is also set aside - appeal disposed off.

Summary

Issues involved: Appeal against imposition of fine and penalties for contravention of import restrictions on 'musk melon dried seeds' under Foreign Trade Policy.

Issue 1: Imposition of fine and penalties upheld by the first appellate authority

The appeals arose from separate orders of Commissioner of Customs (Appeals) upholding fines and penalties imposed by the original authority for contravention of import restrictions on 'musk melon dried seeds' under the Foreign Trade (Development and Regulation) Act, 1992. The appellant sought to clear the goods without the required authorization, leading to confiscation under section 111(d) of the Customs Act, 1962, and penalties under section 112 of the same Act.

Issue 2: Lack of authorization for import and consequences

The first appellate authority found that the appellant did not possess the necessary authorization for importing the restricted goods, leading to the imposition of fines and penalties. The absence of authorization for importing 'musk melon dried seeds' resulted in the goods being deemed unfit for home consumption and ordered for re-export, in accordance with the provisions of the Customs Act, 1962.

Issue 3: Ignorance of policy changes and unjust burden on goods

The appellant claimed ignorance of the policy changes regarding the import of the goods, which were shipped in the same year as the policy amendment. Considering the lack of clearance for home consumption, burdening the goods with fines and penalties was deemed unjust. The Tribunal set aside the redemption fine and penalty, directing the re-export of the goods without imposing additional detriments.

Conclusion: The Tribunal disposed of the appeals by holding the goods liable for confiscation under the Customs Act, 1962, and directing their re-export without imposing fines or penalties, considering the lack of deliberate contravention and the unjust burden on the goods due to policy changes.