CESTAT Kolkata: Trader wins appeal on import policy change, no penalty.

The Appellate Tribunal CESTAT, Kolkata ruled in favor of the appellant, a small trader, in a case concerning the interpretation of the effective date of a Notification for a change in import policy. The Tribunal held that since the Notification was made public after the appellant had already remitted the import amount, they had no control over the import under the changed policy. Therefore, the Tribunal applied the transitional arrangements provision, ruling that the impugned goods should not be confiscated, and no penalty should be imposed. The impugned order was set aside, and the appeal was allowed.

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Issues involved: Interpretation of effective date of Notification for change in import policy and applicability of transitional arrangements for import under letter of credit.

The judgment by the Appellate Tribunal CESTAT, KOLKATA involved a case where the import of betel nuts through Petrapole was restricted by Notification 49/RE/2006 dated 20-2-2007, but made available to the public only on 21-2-2007. The appellant argued that the effective date for the change in import policy should be considered as 21-2-2007 based on the Supreme Court's decision in the case of B. M. Thakkar & Co. Ltd. v. Collector of Customs. The appellant, a small trader, had remitted the amount for import through ICICI Bank on 20-2-2007, unaware of the policy change, and imported the goods on 24-2-2007 under a letter of credit.

The appellant contended that under the policy provision regarding transitional arrangements, where an irrevocable letter of credit was opened before the effective date of the policy change, the impugned goods should not have been confiscated, and no penalty should have been imposed. On the other hand, the respondent supported the impugned order, stating that the import under the bill of entry dated 25-2-2007 was unauthorized due to the policy change.

After considering the submissions, the Tribunal found that since the Notification was made available to the public only on 21-2-2007, and the appellant had already remitted the amount for import on 20-2-2007, they had no control over the import under the changed policy. The Tribunal held that this was a case where the provision relating to transitional arrangements should be applied. Consequently, the Tribunal ruled that the goods should not be confiscated, and no penalty should be imposed, setting aside the impugned order and allowing the appeal. The decision was dictated and pronounced in open court.

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