Appeal allowed in goods import case for non-compliance, reduced fines for minimal profit

The appellant's appeal in a case involving unauthorized import of goods was allowed by the Tribunal. The goods were found liable for confiscation due to non-compliance with policy procedures, but redemption fine and penalties were reduced significantly due to minimal profit margin and no duty implication. The judgment was pronounced on 17-11-2006.

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Issues involved:
The judgment involves the unauthorized import of goods, violation of policy restrictions under Section 111(d) of the Customs Act, 1962, and the imposition of penalties and fines.

Details of the Judgment:

1. The appellant, engaged in processing and refining edible oils, sought clarification from the Commissioner of Customs regarding the import of coconut oil through State Trading Corporation against Advance Release Orders (AROs). An associationship agreement was entered into with the Corporation, and an application for AROs was made to the DGFT.

2. Ministry of Commerce issued a notification allowing State Trading Enterprises to sell goods on a high sea sale basis to advance license holders. The appellant filed a bill of entry for duty-free clearance of coconut oil, which was provisionally allowed against AROs.

3. A show cause notice was issued alleging unauthorized import, leading to confiscation of goods valued at Rs. 1,39,48,735/- and imposition of penalties under the Customs Act, 1962. The Commissioner held that the goods were directly imported, not through the State Trading Corporation.

4. The appellant argued that the import was authorized by the Corporation, following established customs practices. They cited legal precedents to support their case.

5. The appellant contended that even if the sale was on a high sea basis, the policy amendment before the import should benefit them. Reference was made to a Tribunal decision for similar circumstances.

6. The Department argued that the import was not in compliance with the policy in place at the time of shipment, as clarified by the DGFT. The goods were considered directly imported by the appellant.

7. The Tribunal noted procedural lacunae but found the goods liable for confiscation due to non-compliance with policy procedures. However, considering no duty implication and minimal profit margin, the redemption fine and penalty were significantly reduced to Rs. 10,000 each.

8. The appeal was allowed in the above terms, with the judgment pronounced on 17-11-2006.

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