Tribunal overturns Customs penalty, orders release of Garnet. Violations of natural justice found.

The Tribunal set aside the impugned order, directing the Customs authorities at Cochin to release the confiscated Garnet to the appellant. The appeal was allowed, and the penalty imposed under the Customs Act was overturned due to insufficient consideration of documents proving the legality of the minerals. The Tribunal found violations of natural justice in the process and deemed certain requirements, penalties, and charges as unsustainable, ultimately annulling the entire impugned order.

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Issues Involved:
1. Legality of the confiscation of Garnet under Section 113(d) of the Customs Act, 1962.
2. Violation of principles of natural justice in passing the impugned order.
3. Requirement of a certificate of legally mined minerals from the concerned District Collector.
4. Consideration of the goods as prohibited under Section 2(33) of the Customs Act.
5. Applicability of Trade Facility Notice and other instructions issued by Tamil Nadu Government and Cochin Customs House.
6. Imposition of penalty under Section 114(i) of the Customs Act.
7. Demand of testing charges under Section 145 of the Customs Act.

Issue-wise Detailed Analysis:

1. Legality of the Confiscation of Garnet under Section 113(d) of the Customs Act, 1962:
The Commissioner of Customs ordered the absolute confiscation of 13,81,000 kgs of Garnet under 14 shipping bills, 2,48,000 kgs of Garnet stored at the Container Freight Station, and 13,00,000 kgs of Garnet under 16 shipping bills. The appellant argued that the goods were legally mined and transported with proper permits from Andhra Pradesh. The Tribunal found that the appellant had produced sufficient documents to prove the legality of the minerals, which were not adequately considered by the Commissioner.

2. Violation of Principles of Natural Justice in Passing the Impugned Order:
The appellant contended that the impugned order was passed in violation of principles of natural justice, as the show-cause notice was issued on 26/07/2019 with a 30-day period to respond, but the order was passed the next day on 27/07/2019 without considering the appellant's reply. The Tribunal agreed, noting that the Commissioner wrongly claimed that written submissions were filed on 27/07/2019, which was categorically denied by the appellant.

3. Requirement of a Certificate of Legally Mined Minerals from the Concerned District Collector:
The Commissioner insisted on a certificate of legally mined minerals from the District Collector of Tamil Nadu, while the minerals were mined in Andhra Pradesh. The Tribunal found this requirement unreasonable, as the District Collector of Tamil Nadu could not issue such a certificate for minerals mined in Andhra Pradesh. The appellant had already provided necessary documents from Andhra Pradesh authorities.

4. Consideration of the Goods as Prohibited under Section 2(33) of the Customs Act:
The Commissioner considered the goods as prohibited under Section 2(33) of the Customs Act, which was not invoked in the show-cause notice. The Tribunal held that the confiscation order was not legal as it relied on provisions not mentioned in the show-cause notice.

5. Applicability of Trade Facility Notice and Other Instructions Issued by Tamil Nadu Government and Cochin Customs House:
The Commissioner relied on Trade Facility Notice No.13/2016 and instructions from the Tamil Nadu Government, which were issued after the goods were transported to Cochin. The Tribunal held that these instructions could not be applied retrospectively and were not in force when the shipping bills were filed.

6. Imposition of Penalty under Section 114(i) of the Customs Act:
The Commissioner imposed a penalty of Rs. 10,00,000 on the appellant under Section 114(i) of the Customs Act. The Tribunal set aside the penalty, as the confiscation itself was found to be unsustainable.

7. Demand of Testing Charges under Section 145 of the Customs Act:
The Commissioner confirmed the demand of Rs. 20,884 towards testing charges under Section 145 of the Customs Act. The Tribunal did not specifically address this issue in the detailed analysis but set aside the entire impugned order, implying that this demand was also annulled.

Conclusion:
The Tribunal set aside the impugned order, directing the Customs authorities at Cochin to release the impugned goods to the appellant, as the goods could not be exported due to the DGFT Notification No.26/2015-2020. The appeal filed by the appellant was allowed, and the early hearing application was disposed of.

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