9911796707
TMI Blog2024 (4) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... d NOT penalty shall be imposed . Liable to be means likely to be and not shall be . After finding if the goods fall under one of the clauses of the section, the adjudicating authority can exercise his discretion and decide not to confiscate them. If the violation is, for instance, a technical violation or a minor violation, the adjudicating authority has the discretion to NOT confiscate the goods although they are liable to confiscation. The High Court of Delhi has, in JAIN EXPORTS (P) LTD. VERSUS UNION OF INDIA [ 1988 (5) TMI 50 - SUPREME COURT] held that not only does the adjudicating authority have the discretion to decide whether or not to confiscate but he has to exercise this discretion judicially and not arbitrarily. However, since the penalty under section 112 is based on the actions which rendered the goods liable to confiscation under section 111, it would be necessary to see how serious were these actions by the respondent. The Commissioner (Appeals) recorded that there was a reasonable cause for the respondent to classify the goods under CTI 2106 9030. He recorded that there were rulings by the Advance Ruling Authority that boiled areca nut does not fall under CTH 0802 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rol Laboratory [CRCL]. It appeared that the goods were actually "areca nuts" falling under CTI 0802 80 10. Raw areca nuts fall under CTI 0802 80 10 and their import is prohibited as per the foreign trade policy of the Directorate General of Foreign Trade unless their CIF value is over Rs. 251/- per kg. Supari falls under CTI 2106 90 30 and is freely importable. 3. CRCL sent its test report dated 10.12.2020 saying that "the sample is other than betel nut product known as supari as mentioned in the supplementary notes -Note 2 of the Customs Tariff Chapter 21". The imported areca nuts were seized and a Show Cause Notice [SCN] dated 23.2.2021 was issued to the respondent calling upon it to show cause as to why the imported goods declared as 'Unflavoured boiled Supari (betel nuts products)' in the two Bills of entry should not be treated as 'Areca nuts' classifiable under CTI 0802 80 20; why the goods should not be confiscated under sections 111(d), 111(l) & 111 (m) of the Customs Act, 1962 [Act] and why penalty should not be imposed under section 112 (a) (i) of the Act. 4. The respondent contested the proposals in the SCN and submitted that what it had imported was indeed, "unflavour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on payment of fine are concerned, they attained finality. 11. Therefore, the only question before us is if the penalty of Rs. 2,00,000/- imposed on the respondent under section 112 is adequate or is too small. According to the Revenue, this penalty is too small and not proportionate to the offence involved. According to the respondent, the quantum of penalty does not call for any interference. Submissions on behalf of Revenue 12. Shri Rakesh Kumar, learned authorised representative for the Revenue made the following submissions: (i) The adjudicating authority has correctly absolutely confiscated the imported goods as they were imported in violation of the foreign trade policy. (ii) The respondent mis-declared the goods as 'unflavoured boiled supari (betel nuts product)' and also mis-classified them under CTI 2106 9030 so as to circumvent the prohibition on import. (iii) The goods were sent for testing to CRCL who reported that " the sample is other than betel nut product known as supari as mentioned in the supplementary notes -Note 2 of the Customs Tariff Chapter 21". Therefore, they were absolutely confiscated by the original authority. Absolute confiscation was consiste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the goods but does not prescribe any minimum penalty. 18. Section 112 reads as follows: 112. Penalty for improper importation of goods, etc.--Any person,-- (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable,-- (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater; 19. Section 111 says that certain goods brought from a place outside India 'shall be liable to confiscation'. The confiscation of the goods under section 111 in this case as well as their redemption on payment of fine have attained finality. The respondent in this case is the one who imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the adjudicating authority can exercise his discretion and decide not to confiscate them. If the violation is, for instance, a technical violation or a minor violation, the adjudicating authority has the discretion to NOT confiscate the goods although they are liable to confiscation. 25. The High Court of Delhi has, in Jain Exports (P) Ltd. [1987 (29) E.L.T. 753 (Del.)] held that not only does the adjudicating authority have the discretion to decide whether or not to confiscate but he has to exercise this discretion judicially and not arbitrarily. The relevant part of this order is as follows: ……..The language does necessarily imply that there is a discretion because the language is not "such goods shall be confiscated". On the other hand the language is "such goods shall be liable to confiscation". The Collector of Customs when acting under Section 167 obviously acting in a quasi-judicial capacity. When discretion is vested in such a quasi-judicial tribunal, such discretion must be exercised judicially and not arbitrarily. The Collector must decide in each particular case if there were circumstances which would call for the drastic punishment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause the importer's classification of the goods is different from that of the officer, the importer cannot be penalised. We fully agree with the Commissioner (Appeals) that the respondent had a reason to believe that the goods were classifiable under CTI 2106 9030 and this classification cannot be held against the respondent. 30. The second allegation is that the respondent had mis-declared the nature of the goods. They were described as 'unflavoured boiled supari (betel nut products)' and the CRCL report said that " the sample is other than betel nut product known as supari as mentioned in the supplementary notes -Note 2 of the Customs Tariff Chapter 21". Two things are interesting in this report. The CRCL test report does not say what the imported goods were nor does it deny that the goods were 'unflavoured boiled supari'. Secondly, it comments on the classification of the goods as per supplementary notes- Note 2 to Chapter 21'. Classification of the goods under Customs Tariff is the responsibility of the importer or the proper officer or any further appellate authority. The chemical examiner in CRCL has no role to play in the classification because classification is a part of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
