2018 (7) TMI 793 - AT - Customs

Adjudicating authority cannot impose re-export conditions on redemption under Customs Act Section 125. Appeal allowed.

The Tribunal concluded that the adjudicating authority cannot impose conditions for re-export upon redemption under Section 125 of the Customs Act. The ... Release of confiscated goods on payment of redemption fine - steel wires - goods were proposed to be re-exported by Revenue, after payment of Redemption fine - it was alleged that the goods do not meet the Bureau of Indian Standards - import of prohibited goods - Held that:- It is not dispute that the steel wires which were imported did not have the BIS certification required as per the Steel and Steel Products (Quality Control)Order, 2016. It is also not in dispute that in view of the general note 2(a)of Schedule-I of the import policy framed under Foreign Trade and Development Regulations Act, 1992, mandatory BIS standards prescribed for products manufactured in India also apply to imported goods. In other words, goods which do not meet the mandatory BIS requirements cannot be imported into India. Therefore, imported goods are liable for confiscation. As per Section 125 of the Customs Act, whenever goods are confiscated the adjudicating authority has to give an option of redemption to the importer in all cases except in respect of prohibited goods where the adjudicating authority may or may not give the option of redemption. In this case, the adjudicating authority has given the option of redemption with an additional condition that the goods after redemption should be re exported. Jurisdiction - whether after giving option of redemption, the adjudicating authority can also add an extra condition that the goods should be re-exported? - Held that:- Section 125 states that it does not confer upon the Authority passing the Order any power to impose any conditions while allowing redemption of goods - The scope of Section 125 of the Act is limited by the words in which it is framed and it is not open to the adjudicating authority or the Tribunal(who are creatures of the statute) to stretch, modify or restrict the scope of this Section; they are bound by it. The condition in the Order-in-Original that the goods should be re-exported after redemption is liable to be set aside - appeal allowed. Issues Involved:1. Confiscation of imported steel wires under Section 111(d) of the Customs Act.2. Imposition of redemption fine and penalty under Sections 125 and 112(a) of the Customs Act.3. Applicability of the BIS Act, 1986 versus the BIS Act, 2016.4. Legality of imposing conditions for re-export upon redemption of confiscated goods.Issue-wise Detailed Analysis:1. Confiscation of Imported Steel Wires:The appellant imported steel wires that did not conform to the standards under the Steel and Steel Products (Quality Control) Order, 2015, issued under the Bureau of Indian Standards Act. The Additional Commissioner of Customs ordered the confiscation of the goods under Section 111(d) of the Customs Act, 1962, read with the Bureau of Indian Standards Act, 2016, and the Steel and Steel Products (Quality Control) Order, 2015. The goods were found to be non-compliant during the examination, despite the bill of entry being facilitated by the Risk Management System of Customs.2. Imposition of Redemption Fine and Penalty:The Additional Commissioner of Customs provided the appellant an option to redeem the goods for re-export on payment of a redemption fine of Rs. 2,00,000 under Section 125 of the Customs Act, 1962. Additionally, a penalty of Rs. 1,00,000 was imposed under Section 112(a) of the Customs Act, 1962. The appellant contested these penalties and sought a reduction in the penalty and the removal of the re-export condition.3. Applicability of BIS Act, 1986 versus BIS Act, 2016:The appellant argued that their goods could not be confiscated under the BIS Act, 2016, as it had not come into force at the time of import. They contended that the BIS Act, 1986, had been repealed by the Act of 2016, and no quality control orders were issued under the new Act. The Additional Commissioner of Customs confirmed with the Bureau of Indian Standards that the BIS Act, 1986, remained in force until the new Act came into effect. Thus, the confiscation under the 1986 Act was valid.4. Legality of Imposing Conditions for Re-export:The appellant relied on the case of Amba Lal Vs Union of India, where it was held that the Collector of Central Excise had no jurisdiction to impose conditions for the release of confiscated goods. The Tribunal examined whether the adjudicating authority could impose a condition for re-export upon redemption. The Departmental Representative cited cases like Collector of Customs, Bombay Vs Elephanta Oil & Industries Ltd and A K Jewellers Vs Commissioner of Customs, Mumbai, which upheld the imposition of redemption fine and allowed re-export of confiscated goods. However, the Tribunal distinguished these cases, noting that they dealt with voluntary re-export rather than compelled re-export.Conclusion:The Tribunal concluded that Section 125 of the Customs Act does not confer the authority to impose conditions for re-export upon redemption. The adjudicating authority can either allow redemption on payment of fine or not allow redemption, but cannot compel re-export. Thus, the condition that the goods should be re-exported after redemption was set aside. The appeal was allowed to the extent that the re-export condition in the Order-in-Original was removed.Final Order:The condition in the Order-in-Original that the goods should be re-exported after redemption is set aside. The appeal is allowed to this extent.