2011 (1) TMI 113 - AT - Customs

Tribunal overturns Commissioner's order on Hot Rolled Steel Sheets confiscation & penalty under Customs Act

The Tribunal allowed the appeal by setting aside the Commissioner's order confiscating Hot Rolled Steel Sheets and imposing a penalty under the Customs ... Summary disposal - waiver of pre-deposit - confiscation of imported goods for want of import licence - validity of executive circulars vis-a -vis delegated legislation - effect of High Court setting aside a policy circular - remand for fresh adjudication in accordance with law and principles of natural justiceSummary disposal - waiver of pre-deposit - Application for waiver of pre-deposit and interim stay of recovery was considered and disposed of permitting the appeal to be heard without pre-deposit. - HELD THAT: - The Tribunal examined the records and submissions and found the matter fit for summary disposal. The Tribunal dispensed with the requirement of pre-deposit and proceeded to take up the appeal on merits, thereby granting the relief sought in the application to waive pre-deposit and stay recovery for the purpose of adjudicating the appeal. [Paras 1]Pre-deposit waived and appeal admitted for hearing by way of summary disposal.Confiscation of imported goods for want of import licence - validity of executive circulars vis-a -vis delegated legislation - effect of High Court setting aside a policy circular - remand for fresh adjudication in accordance with law and principles of natural justice - Whether the order of confiscation and penalty could be sustained in light of a High Court judgment setting aside the DGFT circular that purported to alter import policy. - HELD THAT: - The appellant had imported Hot Rolled Steel Sheets classifiable under Exim Code 7208 when such sheets were, on the import policy, freely importable. The department relied on a DGFT circular which sought to treat H.R. products under the same Exim Code as restricted; however, the Tribunal noted that the Hon'ble High Court in Writ Petition No.16753 of 2009 had set aside that DGFT policy circular as beyond delegated legislative power. The Tribunal observed that when the Commissioner passed the impugned order of confiscation and penalty he did not have the benefit of the High Court's decision. Given that the import policy prima facie showed the goods were freely importable and the circular relied upon has been set aside, the Tribunal concluded that a final view ought to be taken afresh. Consequently, the Tribunal set aside the impugned order and remanded the matter to the Commissioner of Customs to decide the issue in accordance with law and after affording opportunity under the principles of natural justice. [Paras 2, 3]Impugned order of confiscation and penalty set aside; matter remanded to the Commissioner of Customs for fresh decision in accordance with law and principles of natural justice.Final Conclusion: The Tribunal waived pre-deposit and admitted the appeal for summary disposal; it set aside the order of confiscation and penalty and remanded the matter to the Commissioner of Customs for fresh adjudication in accordance with law and the principles of natural justice, having regard to the High Court's setting aside of the DGFT circular. Issues:1. Confiscation of goods under Sec.111(d) of the Customs Act2. Imposition of penalty under Sec.112(a) of the Act3. Interpretation of import policy for Hot Rolled Steel Sheets4. Validity of the policy circular issued by DGFT5. Applicability of Mumbai High Court judgment on the present caseConfiscation of Goods and Imposition of Penalty: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 and imposing a penalty of Rs. 20 lakhs under Sec. 112(a) of the 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 Revenue contended that the goods fell under a restricted category as per a notification issued by the DGFT, leading to the confiscation and penalty imposition. The Tribunal found that the appellant's argument was not accepted by the Revenue, resulting in the impugned order.Interpretation of Import Policy and Mumbai High Court Judgment:The appellant presented a judgment of the Mumbai High Court which invalidated a policy circular of the DGFT, stating that the circular exceeded the authority of delegated legislation. The High Court held that the DGFT could not modify import policy through circulars but required formal notifications under the Foreign Trade (Development and Regulation) Act, 1992. Acknowledging the High Court's decision, the Tribunal noted that the import policy classified Hot Rolled Steel Sheets under Exim Code 7208 as freely importable during the dispute period. Consequently, the Tribunal set aside the Commissioner's order and remanded the case for a fresh decision considering the High Court's judgment and the import policy provisions. The appeal was allowed by way of remand for further consideration.In conclusion, the Tribunal's decision focused on the interpretation of the import policy for Hot Rolled Steel Sheets, the validity of the DGFT's policy circular, and the applicability of the Mumbai High Court judgment on the case. The Tribunal emphasized the need for the Commissioner of Customs to reconsider the case in light of the High Court's ruling and the import policy provisions to ensure a fair and just decision based on legal principles and natural justice.