2018 (6) TMI 939 - AT - Customs

Tribunal upholds confiscation of imported spares for improper declaration

Crown Maritime Company (I) Versus Commissioner of Customs (Import) Mumbai

The Tribunal upheld the confiscation of imported old and used spares due to improper declaration and violation of Foreign Trade Policy provisions. The ... Whether the Appellants imported old and used spares / parts in contravention of FTP provisions and liable for confiscation and whether the importer appellant liable for penalty? - Held that:- The Bills of Entries were filed by the appellants for the goods booster pump and spares / parts. There is no dispute as regards import of old and used spares. As per Para 2.17 of FTP all second hand goods, except second hand capital goods, shall be restricted for imports. Further, as per Para 2.33 of HOP import of second hand capital goods, shall be allowed on on production of a Chartered Engineers Certificate that such spares have at least 80% residual life of original spare. No such certificate from Chartered Engineer is appearing on record. The goods were imported in contravention of the FTP policy and liable for confiscation and the appellants are liable for Penalty - however, the quantum of redemption fine and penalty reduced. Appeal allowed in part. Issues: Import of old and used spares without declaration, violation of Foreign Trade Policy provisions, confiscation of goods, imposition of penalty.Analysis:1. The appellant imported goods declared as old and used spares without proper declaration. The Customs Commissioner ordered confiscation of the goods under Sections 111(d), 111(l), and 111(m) of the Customs Act, 1962, along with a fine and penalty. The appellant argued that the imported goods fell under the definition of capital goods as per Cenvat Credit Rules, 2004, and were allowed to be freely importable under the Foreign Trade Policy 2004-09. They contended that the goods were meant for providing taxable services and were not prohibited goods. However, the appellant did not appear during the proceedings.2. The Assistant Commissioner representing the revenue reiterated that the imported goods were old and used spares, not declared properly, and imported in violation of the Foreign Trade Policy provisions. He argued that since the goods were imported illegally without a license, confiscation and penalty were justified under the Customs Act, 1962. The Assistant Commissioner highlighted the discrepancies in the declaration and emphasized that the goods were correctly confiscated and penalty rightly imposed on the appellant.3. Upon careful consideration, the Tribunal analyzed whether the appellant imported old and used spares in contravention of the Foreign Trade Policy provisions and if they were liable for confiscation and penalty. It was noted that the goods imported were old and used spares, falling under the restrictions of Para 2.17 of the Foreign Trade Policy. The Tribunal observed that no Chartered Engineer's Certificate was produced to prove the residual life of the spares. Additionally, some goods were not declared by the appellant. Consequently, the Tribunal upheld the confiscation of goods and imposed a penalty. However, considering the circumstances, the redemption fine was reduced to Rs. 10,00,000 and the penalty to Rs. 1,00,000.4. In the final decision, the impugned order was modified to reduce the redemption fine and penalty. The appeal was disposed of accordingly, with the modified penalties imposed. The judgment was pronounced in court on 23/05/2018.