1. After hearing both sides I find that the dispute in the present appeal relates to the confiscation of the imported betel nuts and imposition of penalty upon the appellant in terms of provisions of section 112 of the Customs Act, 1962.
2. As per facts on record, the appellant imported betel nuts from Bangladesh at the declared value of Rs. 55.93 to Rs. 56.07 per kg.. In terms of Notification No. 12(RE-2013)/2009-2014 : dated 13.05.2013, issued by the Directorate General of Foreign Trade, the betel nuts below the CIF value of Rs. 110/- per kg. cannot be imported. The authorities below entertained a view that inasmuch as the value of the betel nuts in question was below Rs. 110/- per kg., their import was hit by the Notification in question. However, the authorities allowed the betel nuts to be cleared on payment of duty, but confiscated the same in terms of the provisions of section 111(d) of the Customs Act, 1962 with an option to the appellant to redeem the same on payment of redemption fine of Rs. 23,48,000/- The duty was calculated on the basis of tariff value fixed by the CBEC vide Notification No. 93/2013-CUS(NT) dated 30.08.2013 by adopting the value as USD 1870.00 per MT.. The adjudicating Commissioner also imposed penalty of Rs. 1,96,000/- in terms of section 112(a) of the Customs Act, 1962. The confiscation and imposition of penalty is under challenge in the present appeal.
3. Touching briefly on the developments on the said Notification issued by DGFT, the ld. Advocate submits that the same was challenged by the importers industry before the Hon'ble High Court of Calcutta in the case of Bimal Kumar Modi v. UOI and the Hon'ble High Court in their decision reported as : 2014 (306) E.L.T. 97 (Cal.)] held the same to be ultra vires on the ground that DGFT has no powers to formulate and announce the Foreign Trade Policy, which power is vested only with the Central Govt.. The said order of the Single Bench of the Hon'ble High Court was appealed against by the Revenue before the Division Bench. The Hon'ble High Court in the case of UOI v. Navin Kr. Jha reported as : 2016 (341) E.L.T. 561 (Cal.) reversed the said order of the Single Bench of the Hon'ble High Court and held that DGFT Notification laying down CIF value for the purposes of import of the goods was well within their powers and jurisdiction. However, the matter was remanded for consideration of the pleas that policy was irrational and detrimental to interest of country and also the fact that the power vested under the act was intended to be used with respect to quantity of goods to be imported and not with respect to value of the goods. Ld. Advocate clarifies that the said remand proceedings are pending before the Hon'ble High Court and have not yet been decided. However, his contention is that the Revenue having allowed the clearance of the goods on payment of tariff value, could not have confiscated the goods in terms of section 111(d) of the Customs Act and could not have imposed penalty. By drawing my attention to the provisions of section 111(d) which are to the effect that any goods imported or attempted to be imported contrary to any prohibition imposed by the act are liable to confiscation. By dwelling his arguments on the language used in the said section, he submits that though there was a restriction on the import of betel nuts based upon the value of the same, such restriction cannot be equated with prohibition, thus justifying confiscation of the goods under the said section. For the above proposition he relies upon the Tribunal's decision in the case of International Seaport Dredging Ltd. v. CC & ST, Visakhapatnam reported as : 2016 (342) E.L.T. 123 (Tri.-Hyd.)].
4. After hearing the ld. AR for the Revenue and after going through the impugned orders and after appreciating the entire developments in respect of the Notification issued by DGFT, I find that the appellant has been allowed to clear the goods on payment of duty at the tariff rate fixed by the Government. As such it cannot be said that the goods were prohibited goods. Tribunal in the above referred decision in the case of International Seaport Dredging Ltd. has considered an identical situation. While rejecting the Revenue's plea that inasmuch as the goods required a licence to be imported, thus making them restricted, the Tribunal observed as under:-
6. In the instant case there is no prohibition in force against import of the vehicles. There is only restriction in Import Licensing Notes of Chapter 87 of Import Export Policy, 2004-2009, that importation of new vehicles shall be permitted only through specified Customs Port at Nhava Sheva, Kolkata, Chennai, ICD-Tuglakhabad, Delhi Air Cargo and Mumbai Port. Other conditions of import are also specified in the said licensing notes. However, there is no prohibition on their importation. By any stretch of imagination, the word restriction cannot be equated or read as prohibition. This being so, invocation of Section 111(d) is not in order. Possibly one or more of the situations attracting confiscation as listed out in Section 111(a) to (p) may well have been applicable to the facts of this case, but definitely not Section 111(d). In the event the goods are not liable for confiscation under Section 111(d) and by implication the invocation of Section 112(a) and Section 125 are also not sustainable. We, therefore, have no hesitation in setting aside the impugned order to the extent of confiscation of the goods under Section 111(d), imposition of redemption fine under Section 125 and imposition of penalty under Section 112(a) of the Act ibid.
In the present case also it is the Revenue's contention that the goods being a lesser value required a licence and thus has to be considered as prohibited. However, I find that the decision of the Tribunal in the above referred case is squarely applicable to the facts of the present case. As such I find no justifiable reasons to confiscate the betel nuts in question.
5. As regards penalty imposed under s
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ection 112 of the Customs Act, appellant's contention is that inasmuch as the goods have been held as not confiscable, the said provision would not apply. I find force in the contention. Penalty in terms of section 112(a) of the Customs Act is imposable where a person does anything or omits to do anything rendering the goods liable to confiscation. Inasmuch as I have already held that the goods are not liable to confiscation, the imposition of penalty upon the appellant is also not justified and the same is accordingly set aside. 6. In a nutshell the impugned order is set aside and appeal allowed with consequential relief, if any, to the appellant.