Tribunal overturns customs confiscation & penalty, citing Mumbai High Court ruling

The Tribunal allowed the appeal challenging the confiscation of Hot Rolled Steel Sheets under Sec.111(d) of the Customs Act and the imposition of a penalty under Sec.112(a). Relying on a Mumbai High Court judgment invalidating a policy circular issued by the DGFT, the Tribunal found the goods were freely importable during the disputed period. The Commissioner's decision lacked the benefit of this ruling, leading to a remand for a fresh decision in accordance with the law and principles of natural justice. The appeal was allowed, setting aside the earlier order.

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Issues:
1. Confiscation of goods under Sec.111(d) of the Customs Act.
2. Imposition of penalty under Sec.112(a) of the Act.
3. Interpretation of import policy for Hot Rolled Steel Sheets.
4. Validity of the policy circular issued by DGFT.
5. Applicability of the Mumbai High Court judgment on the present case.

Analysis:
1. The appeal challenged the Commissioner's order confiscating Hot Rolled Steel Sheets imported by the appellant in April 2009 under Sec.111(d) of the Customs Act. The appellant argued that the goods were freely importable as per the relevant classification and did not require a specific import license. However, the department contended that the goods were restricted based on a notification issued by the DGFT, thereby justifying the confiscation and penalty imposition.

2. The Commissioner's order also imposed a penalty of Rs. 20 lakhs under Sec.112(a) of the Act. The appellant sought relief based on the argument that the goods were not subject to restriction as per the import policy in force during the relevant period. The penalty was a consequence of the alleged violation of import regulations.

3. The appellant presented a copy of the Mumbai High Court judgment which invalidated the policy circular issued by the DGFT, stating that such alterations in import policy should be done through formal notifications under the Foreign Trade (Development and Regulation) Act, 1992. The High Court's decision highlighted the procedural irregularity in changing import policies through circulars.

4. Considering the Mumbai High Court's judgment and the import policy applicable to Hot Rolled Steel Sheets, the Tribunal found that the goods were freely importable during the disputed period. The Tribunal emphasized that the Commissioner's decision lacked the benefit of the High Court's ruling and remanded the case for a fresh decision in line with the law and principles of natural justice. The appeal was allowed by way of remand, setting aside the earlier order.

5. The Tribunal's decision was based on the interpretation of the import policy, the impact of the High Court judgment on the present case, and the procedural validity of the policy circular issued by the DGFT. The case highlighted the importance of adhering to statutory procedures in amending import policies and ensuring fair adjudication based on prevailing laws and judicial precedents.

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