Tribunal allows export of goods, overturns penalty under Customs Act. Nano category exemption not applicable.

The Tribunal allowed the export of confiscated goods and set aside the penalty imposed under Section 112(a) of the Customs Act, 1962. The appellant's argument regarding the goods falling under the Nano category and being exempt from certain regulations was considered. The Tribunal emphasized the need for compliance with regulatory requirements at the time of import, noting that the subsequent guidelines exempting Nano category imports were not applicable during the import period in 2017.

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Issues:
- Classification of imported goods as drones
- Requirement of permission and license for import
- Applicability of guidelines at the time of import
- Confiscation of goods and imposition of penalty

Classification of Imported Goods as Drones:
The appellant imported Remote Control Quadcopter and Remote Control Toy Monster Truck, classifying them under CTH 95030090. The goods were examined, and it was observed that the Quadcopter was capable of flying at low altitude, leading to concerns regarding its classification as a drone. The distinction between drones and quadcopters was highlighted by the appellant, emphasizing that the imported goods fell under the Nano category, exempting them from certain regulations. The argument focused on the technical differences between drones and quadcopters and the perception of laymen regarding these terms.

Requirement of Permission and License for Import:
The Directorate General of Civil Aviation (DGCA) and the Directorate General of Foreign Trade (DGFT) had issued regulations requiring prior clearance and import licenses for Unmanned Aerial Vehicles (UAVs) and drones. The appellant failed to obtain the necessary permissions, leading to the confiscation of the goods and the imposition of a penalty. The appellant argued that the guidelines exempted Nano category imports from requiring permits, highlighting the subsequent guidelines issued by DGCA permitting such imports without restrictions.

Applicability of Guidelines at the Time of Import:
The dispute centered on the timing of the import in 2017, when regulations mandated permissions and licenses for drone imports. The appellant contended that the subsequent guidelines issued in 2018 exempted Nano category imports, making the goods eligible for import without restrictions. The Tribunal considered the timeline of events and concluded that the restrictions were applicable during the import period, justifying the confiscation of goods due to non-compliance with regulatory requirements.

Confiscation of Goods and Imposition of Penalty:
The original authority confiscated the goods and imposed a penalty for contravention under Section 112(a) of the Customs Act, 1962. The Tribunal, after evaluating the submissions and relevant regulations, allowed the confiscated goods to be exported by the appellant. The penalty imposed was deemed unjustified and lacking proper reasoning, leading to its setting aside by the Tribunal. The judgment highlighted the absence of justification for the penalty in the original order and the subsequent affirmation in the impugned order.

In conclusion, the Tribunal disposed of the appeal by permitting the export of confiscated goods and setting aside the imposed penalty, emphasizing the importance of compliance with regulatory requirements at the time of import and the subsequent changes in guidelines affecting the import eligibility of the goods.

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