2019 (9) TMI 127 - AT - Customs

Confiscation Order Overturned, Goods Released with Conditions

CREATIVE EDUCATION Versus COMMISSIONER OF CENTRAL TAX, BANGALORE

The Tribunal found the confiscation order legally unsustainable and allowed provisional release of confiscated goods upon payment of Customs duty and a ... Provisional release of the confiscated goods - Model Helicopter - restricted goods or not - case of appellant is that the applicant has been importing the very same items through the very same port year after year and there has not been any restriction - change of classification by Revenue. HELD THAT:- The applicant has been importing the same item for the last couple of years from the same port and has been classifying the same under Chapter 95 and the Customs authorities have never raised the objection that the said goods are falling under the restricted category - also the applicant has placed on record his earlier Bill of Entry filed before the same Customs authorities which have been clearing the same goods without any objections. In the present case, the impugned goods also fall under the category of Nano and therefore as per the latest instructions issued by the DGCA, no clearance from DGCA and licence from DGFT is required. The order of confiscation is not sustainable in law - the application of the applicant for provisional release of the impugned goods on payment of appropriate Customs duty is allowed - the applicant is directed to furnish a bond of ₹ 20 lakhs to the Customs authorities - Customs authorities are directed to release the impugned goods, thereafter. Appeal allowed in part. Issues:1. Application for provisional release of confiscated goods.2. Classification of imported goods under restricted category.3. Confiscation and penalty under Customs Act, 1962.4. Appeal rejection by Commissioner (Appeals).5. Interpretation of DGCA guidelines for clearance requirements.6. Consideration of historical import practices and classification consistency.7. Legal sustainability of the confiscation order.Analysis:1. The appellant applied for provisional release of confiscated goods, including RC helicopters, classified under CTH 9503 00 30. Customs authorities demanded clearances from DGCA and DGFT, leading to a show cause notice and subsequent confiscation under Section 111(d) of the Customs Act, 1962, with a penalty imposed under Section 112(a). The appeal to the Commissioner (Appeals) was also rejected.2. The appellant argued that historical imports of similar goods were not restricted, and the current classification under Chapter 88 was disputed. Reference was made to DGCA guidelines exempting Nano category RPA from clearance requirements, applicable to the imported goods weighing less than or equal to 250 grams.3. The AR supported the impugned order, citing notifications and DGCA restrictions. However, the Tribunal noted the consistent import practices of the appellant without objections, emphasizing the exemption for Nano category goods from DGCA and DGFT clearances, as per recent instructions.4. After evaluating both sides' submissions and the record, the Tribunal found the confiscation order legally unsustainable. It allowed provisional release on payment of Customs duty and a bond of Rs. 20 lakhs, directing the Customs authorities to release the goods based on the classification and exemption criteria discussed.5. The Tribunal's decision highlighted the importance of consistent classification practices, historical import behavior, and adherence to updated regulatory guidelines in determining the legality of confiscation orders under the Customs Act, 1962. The judgment emphasized the need for authorities to align with current regulatory exemptions for specific categories of goods to avoid unnecessary confiscations and penalties.