2024 (1) TMI 143 - AT - Customs

Confiscation - penalty - import of Watermelon Seeds falling under Customs Tariff Heading 12077090 - restricted vide Notification No. 03/2015-20 dated 26.04.2021 or not - the case was made by the department on the basis that the restriction imposed on goods namely Watermelon Seeds at the time of filing of Bill of Entry and the clearances of the goods thereunder. HELD THAT - If the goods are imported which is freely importable under foreign trade policy and the same is subsequently subject to any restriction or regulation , the import shall be permitted notwithstanding such restriction subject to condition that the shipment of import is made within the original validity period of an irrevocable commercial letter of credit established before the date of imposition of such restriction - the documents were admittedly submitted before restriction imposed in import of watermelon seeds brought vide DGFT Notification No. 3/2015-20dated 26.04.2021. From the documents, it is undisputed that the appellant had complied with the stipulation of Transitional Arrangement as per Foreign Trade Policy as the appellant had paid entire amount of the consignment in question much prior to watermelon seeds being placed under restricted category from free category - the appellant are eligible for consequential benefit of import qua FTP provisions. The lower authorities have failed to appreciate the aforesaid factual and legal position whereby the impugned order upholding confiscation of goods and penalties on the appellant is not sustainable and liable to be set aside. The impugned order set aside - appeal allowed.

Summary

Issues:
The judgment involves the appeal against the rejection of the appellant's appeal by the Learned Commissioner (Appeals) regarding the confiscation of Watermelon Seeds under Customs Tariff Heading 12077090 due to failure to fulfill conditions stipulated in a notification, leading to seizure and penalties imposed under the Customs Act, 1962.

Details:
The appellant filed a Bill of Entry for clearance of Watermelon Seeds, which were restricted under a notification. The goods were seized and penalties were imposed by the Adjudicating Authority. The appeal was filed against the Order-In-Original, which was rejected by the Commissioner (Appeals), leading to the present appeal.

The appellant's counsel argued that the restriction imposed post shipment of the goods should not apply as the shipment was made within the original validity period of an irrevocable commercial letter of credit, as per the Transitional Arrangements of the Foreign Trade Policy 2015-20. The counsel presented import documents supporting this argument, showing that the restriction should not be applicable in this case.

The Revenue representative reiterated the findings of the impugned order, but the Tribunal carefully considered the submissions and records. The Tribunal noted that under para 1.05 of the Transitional Arrangements, if goods are freely importable under the foreign trade policy and subsequently subjected to a restriction, import should be permitted if the shipment is made within the original validity period of an irrevocable commercial letter of credit established before the imposition of the restriction. The appellant had submitted relevant documents showing compliance with these provisions.

The Tribunal observed that the lower authorities failed to appreciate the factual and legal position correctly. It concluded that the appellant was eligible for the benefit of import under the Foreign Trade Policy provisions. Therefore, the impugned order upholding the confiscation of goods and penalties was set aside, and the appeal was allowed with consequential relief.