2015 (3) TMI 329 - AT - Customs

Appellate Tribunal rules on import of garlic, holding DGFT Circular not retrospective.

M/s IMRAN TRADING ESTABLISHMENT Versus COMMISSIONER OF CUSTOMS (GENERAL), MUMBAI

The Appellate Tribunal CESTAT Mumbai ruled in favor of the appellant in a case concerning the import of garlic. The Tribunal held that the DGFT Circular ... Confiscation of goods - department alleged that the goods, namely, Garlic were not Dried Garlic and, therefore, subjected to import restriction as per the circular issued by DGFT on 17.9.1999. - Misdeclaration of goods - Held that:- Issue involved herein is covered by the ruling of the Hon'ble Supreme Court in the case of Suchitra Components Ltd. (2007 (1) TMI 4 - SUPREME COURT OF INDIA). Accordingly, respectfully following the same, I hold that Circular dated 17.9.1999 will not have retrospective effect. In absence of any prescribed moisture content, confiscation and penalties are set aside - Decided in favour of assessee. Issues:Import of goods - Classification of goods as dried garlic - Import restrictions based on moisture content - Confiscation of goods - Imposition of redemption fine and penalty - Applicability of DGFT Circular dated 17.9.1999 - Retrospective effect of circular - Legal precedent set by the Supreme Court.Classification of Goods as Dried Garlic:The case involved the import of garlic by the appellant, which was alleged by the department to not meet the criteria of dried garlic as per the circular issued by DGFT on 17.9.1999, which specified a maximum moisture content of 10%. The Commissioner of Customs passed an order confiscating the goods and imposing a redemption fine and penalty on the appellant. However, the appellant argued that the issue had already been settled by the Supreme Court in the case of Suchitra Components Ltd., where it was held that imports made before the circular's issuance cannot be retroactively affected by it. The Tribunal, after considering the arguments and case records, held that the circular would not have retrospective effect. Consequently, the confiscation and penalties were set aside, and the appeal was allowed in favor of the appellant.Legal Precedent and Applicability of DGFT Circular:The key point of contention was the applicability of the DGFT Circular dated 17.9.1999 to the import of garlic by the appellant. The appellant relied on the legal precedent set by the Supreme Court in the case of Suchitra Components Ltd., which established that circulars cannot have retrospective effect on imports made before their issuance. The Tribunal, in line with this precedent, concluded that the circular in question would not apply retroactively to the appellant's import of garlic in 1999. This decision led to the setting aside of the confiscation and penalties imposed on the appellant, providing them with consequential relief as per the law.Confiscation of Goods and Imposition of Penalties:The Commissioner of Customs had confiscated the imported garlic and imposed a redemption fine and penalty on the appellant based on the allegation that the goods did not meet the criteria of dried garlic as per the DGFT Circular. However, the Tribunal, following the legal precedent established by the Supreme Court, ruled that the circular could not be applied retrospectively to the appellant's import. As a result, the confiscation of goods and imposition of penalties were set aside, providing relief to the appellant in accordance with the law.In conclusion, the judgment by the Appellate Tribunal CESTAT Mumbai in this case addressed the issues surrounding the classification of goods as dried garlic, the applicability of the DGFT Circular dated 17.9.1999, and the imposition of penalties and confiscation by the Commissioner of Customs. By invoking the legal precedent set by the Supreme Court, the Tribunal ruled in favor of the appellant, setting aside the confiscation and penalties, and providing consequential relief.