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TMI Blog2023 (6) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... have approached the Hon ble High Court of Kerala by filing a writ petition for appropriate relief. While disposing the writ petition, Hon ble High Court has directed the Revenue to handover the test reports and allow the petitioner to draw samples for re-testing so as to establish that the goods imported in question are not prohibited goods. Both the directions of the Hon ble High Court were not complied with by the Revenue. The appellants are engaged in the manufacture of paints for which they import industrial composite solvent, a raw material, use it captively in the manufacture of paints. They have been importing the same goods earlier also, declaring it under the same chapter sub-heading 38140010 of Customs Tariff Act, 1975 on the basis of invoice, chemical analysis report supplied along with goods by overseas supplier; the Customs Department also assessed it accordingly accepting the same and no objection was raised. In relation to the present consignment, except re-testing the samples, the reports though disputed by the Appellant, no further investigation was carried out, nor any statement of the appellant was recorded, whereby it could be inferred that the appellant had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the extent of setting aside the direction of absolute confiscation and condition of re-export for redemption on payment of fine and penalty and hold that the goods are liable for confiscation; in the event the appellant choose to redeem the goods on payment of fine and penalty, he shall be allowed to exercise the said option and after payment fine of Rs.75,000/- and penalty of Rs.30,000/- as determined by the adjudicating authority, the goods be released to the Appellant forthwith - The appeal is disposed of. - HON'BLE Dr. D.M. MISRA, MEMBER (JUDICIAL) And HON'BLE Mrs. R. BHAGYA DEVI, MEMBER (TECHNICAL) Shri Baby, M.A., Advocate for the appellant Shri K.A. Jathin, Deputy Commissioner(AR) for the respondent ORDER Per : DR. D. M. MISRA These two miscellaneous applications have been filed, one seeking direction for supply of test reports drawl of samples for retesting, and the second one for release of the goods pending disposal of the Appeals. On the previous day of hearing i.e. on 19.4.2023, on the suggestion of the Bench to take up the appeal itself for disposal, after handing over the copy of test reports to the appellant by the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gencies, hence import is in violation of the Import Policy, accordingly prohibited goods; he ordered absolute confiscation of goods under Sections 111 (d) and 111 (m) of the Customs Act, 1962, but allowed to redeem the same for the purpose of export on payment of redemption fine of ₹ 75,000/- under the provisions of section 125 of Customs Act, 1962; imposed penalty of ₹30,000/- under Section 112 (a) of Customs Act, 1962. Since the office of the Commissioner (Appeals) was vacant, the appellant filed a writ petition before the Hon ble High Court of Kerala at Ernakulam challenging the action of the Department. The Hon ble High Court passed the following direction:- i. The 2nd respondent shall provide to the petitioner copies of all test reports/report relied upon in Ext.P2 order to establish that the goods imported by the petitioner are prohibited goods. This shall be done within one week from the date of receipt of a certified copy of the judgment; ii. A sample of the product shall also be permitted to be drawn by the petitioner for establishing that the goods in question are not prohibited goods. This shall also be permitted within a period of one week from the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Commissioner of Customs (Imports) by order dt. 01/07/2022 directed absolute confiscation of the goods, allowed redemption on payment of fine of Rs.75,000/- only for the purpose of re-export; also imposed penalty of Rs.30,000/-. 3.2. The Ld. Advocate submitted that even after the direction of the Hon ble High Court the Appellants were not handed over the Test Reports nor sample was allowed to be drawn and sent to a Specialized Laboratory like Indian Institute of Petroleum, Dehradun to establish that the same are not prohibited goods. The test reports were handed over to them now only after the direction of the Tribunal. 3.3. It is further submitted that since almost one and half year has been passed and drawl of sample and testing in a reputed Lab will cause further delay, the Appellants are keen to release the goods on payment of fine for its use in the factory. 3.4. The learned Advocate argued that the direction of absolute confiscation by the adjudicating authority, and redemption only for the purpose of re-export on payment of fine, is unsustainable in law as the import and use of the said goods is not completely banned, nor the import was in excess of the quanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of customs, Cochin Vs. Office Devices 2009 (240) ELT 336(Ker.), Commissioner of customs(Export), Chennai Vs. Sri Venkateswara Enterprises 2014 (310) ELT 433(Mad.). 4. Per contra, the learned AR for the Revenue reiterating the orders submitted that the imported goods, after analysis in two laboratories found to be kerosene, the import of which is allowed only through canalised agencies; hence the said goods are prohibited goods. It is his submission that the adjudicating authority has rightly directed absolute confiscation of the goods being prohibited one; however, allowed to re-export the same on payment of appropriate redemption fine. It is his contention that there is no error in such direction in view of the judgment of the Hon ble Supreme Court in the case of UOI Vs. Raj Grow Impex LLP [2021(377) ELT 145 (SC)] Collector of Customs, Bombay Vs. Elephanta Oil Industries Ltd. 2003 (152) ELT 257(SC) and the judgment of Hon ble Madras High Court in the case of Chennai Marine Trading (P) Ltd. Vs. CC (Seaport Import), Chennai [2014(304) ELT 354 (Mad.)]. 5. In his re-joinder, the Ld. Advocate has submitted that the case laws cited by the Ld. AR for the Revenue is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an admitted fact that copies of both test reports were not handed over to the appellant nor further testing of sample was allowed by the Department to be drawn for test in a well-equipped reputed Laboratory. Being not satisfied with the said test reports, and the subject assessment order of the adjudicating authority directing absolute confiscation and imposing condition of re-export after payment of fine and penalty, they have approached the Hon ble High Court of Kerala by filing a writ petition for appropriate relief. While disposing the writ petition, Hon ble High Court has directed the Revenue to handover the test reports and allow the petitioner to draw samples for re-testing so as to establish that the goods imported in question are not prohibited goods. Both the directions of the Hon ble High Court were not complied with by the Revenue. 11. With the said grievance, the Appellant approached this Tribunal. During the course of hearing, on the direction of the Bench, the copies of test reports were handed over to the appellant and the appellant after going through the test reports initially insisted for further re-testing by a reputed laboratory but later submitted that in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e quantity under the Policy and if allowed to be released on payment of fine to be sold in India, then it would have adversely affected the interest of indigenous farmers. In that scenario, giving due weight to the public interest in contrast to the interest of few importers, the Hon ble Supreme Court upheld the imposition of fine and penalty with the direction of re-export of the goods. It is observed as : 81. It needs hardly any elaboration to find that the prohibition involved in the present matters, of not allowing the imports of the commodities in question beyond a particular quantity, was not a prohibition simpliciter. It was provided with reference to the requirements of balancing the interests of the farmers on the one hand and the importers on the other. Any inflow of these prohibited goods in the domestic market is going to have a serious impact on the market economy of the country. The cascading effect of such improper imports in the previous year under the cover of interim orders was amply noticed by this Court in Agricas (supra). This Court also held that the imports were not bona fide and were made by the importers only for their personal gains. 82. The sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred by Section 125 thereof, has to ensure that such exercise is in furtherance of accomplishment of the purpose underlying conferment of such power. The purpose behind leaving such discretion with the Adjudicating Authority in relation to prohibited goods is, obviously, to ensure that all the pros and cons shall be weighed before taking a final decision for release or absolute confiscation of goods. 17. In the present case, the appellants have imported goods viz. Industrial solvents for consumption in their factory for manufacture of paints. Hence, the interest of public would not in any manner be affected if the said goods are allowed to be used by the Appellant for their own use even if found to be a different item than imported, the import of which is allowed only through canalized agencies. There is no allegation that the import was not bona fide and the Appellant knowingly imported kerosene in the guise of Industrial solvent not for use in their factory but for sale. But, simultaneously, it cannot be ignored that that on the basis of the re-test reports the goods are liable for confiscation and ground for imposition of penalty, till further test of the samples resulting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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