2016 (11) TMI 176 - AT - Customs

Tribunal rules in favor of Appellant in customs case; overturns Commissioner's order

M/s International Seaport Dredging Ltd. Versus CC & ST, Visakhapatnam-Cus

M/s International Seaport Dredging Ltd. Versus CC & ST, Visakhapatnam-Cus - 2016 (342) E.L.T. 123 (Tri. - Hyd.) Issues:- Interpretation of Customs Tariff Heading 87041090- Conformity to conditions set in Import Licensing Notes to Chapter 87- Application of Sections 111(d), 112(a), and 125 of Customs Act, 1962Interpretation of Customs Tariff Heading 87041090:The Appellant imported dumpers under Customs Tariff Heading 87041090, claiming them as 'motor vehicles for the transport of goods'. The Commissioner of Customs concluded that these dumpers are considered vehicles under the Motor Vehicles Act, requiring compliance with Motor Vehicles Rules and Import Licensing Notes to Chapter 87. The Commissioner also noted the absence of evidence to prove compliance with the mentioned conditions. However, the Tribunal found that the dumpers were not prohibited goods, and the importation was not against any prohibition. The Tribunal emphasized that the term 'restriction' in the Import Licensing Notes does not equate to 'prohibition'. Therefore, the invocation of Section 111(d) for confiscation was deemed inappropriate, and the Tribunal set aside the order regarding confiscation.Conformity to conditions set in Import Licensing Notes to Chapter 87:The Commissioner's order imposed a significant Customs Duty, proposed confiscation of the goods, and levied a penalty under Section 112(a) of the Customs Act, 1962. The Appellant argued that the confiscation under Section 111(d) was unjustified as the dumpers were not prohibited goods and were properly imported. The Department contended that since Visakhapatnam port was not a notified port for new motor vehicles, the goods were contrary to the prohibition, justifying confiscation. However, the Tribunal ruled that the goods did not meet the criteria for confiscation under Section 111(d) and subsequently overturned the decision on confiscation, redemption fine, and penalty under Section 112(a).Application of Sections 111(d), 112(a), and 125 of Customs Act, 1962:The Tribunal analyzed the provisions of Sections 111(d), 112(a), and 125 of the Customs Act, 1962. It highlighted that in the absence of a prohibition on the import of the dumpers, the invocation of Section 111(d) for confiscation was incorrect. As there was no basis for confiscation under Section 111(d), the penalties under Sections 112(a) and 125 were deemed unsustainable. Consequently, the Tribunal allowed the appeal, setting aside the order related to confiscation, redemption fine, and penalty under Section 112(a) of the Customs Act, 1962.