2020 (6) TMI 126 - AT - Customs

Tribunal upholds penalty for Palm oil import violation, reduces fine, imposes redemption fine

M/s. Liberty Oil Mills Limited Versus C. C-Cochin-Cus (Vice-Versa)

M/s. Liberty Oil Mills Limited Versus C. C-Cochin-Cus (Vice-Versa) - 2021 (375) E.L.T. 273 (Tri. - Bang.) Issues:1. Import of Palm oil through Kochi Port in violation of Notification2. Imposition of penalty under Section 112 of Customs Act, 19523. Applicability of transition period provisions4. Validity of contract in relation to import restrictions5. Effect of High Court judgment on stay of operation6. Principles of doctrine of merger, unjust enrichment, and promissory estoppel7. Imposition of redemption fineAnalysis:1. The case involved the import of Palm oil through Kochi Port by M/s Liberty Oils Ltd. in violation of a Notification prohibiting such imports. The High Court initially stayed the operation of the Notification but later dismissed the Writ Petition. Subsequently, a Show Cause Notice (SCN) was issued seeking confiscation of the imported goods and imposition of penalty under Section 112 of the Customs Act, 1952.2. The Commissioner imposed a penalty of &8377; 80 Lakhs on M/s Liberty Oils Ltd., refraining from imposing a redemption fine as the goods were already released. Appeals were filed by both the appellant against the penalty and the revenue against the non-imposition of redemption fine.3. The appellant argued that a firm contract was established before the import restriction came into effect, invoking transition period provisions to contest the penalty imposition. Various case laws were cited in support of this argument.4. The Commissioner contended that the importer failed to comply with the Notification requirements as they did not open an irrevocable commercial letter of credit, making the import impermissible. The Commissioner emphasized the strict construction of the law and cited relevant case laws to support their stance.5. The Commissioner further argued that with the High Court's final order quashing the Writ Petition, the stay of operation was rendered non est, leading to the restoration of the pre-stay position. The principles of doctrine of merger, unjust enrichment, and promissory estoppel were highlighted to support the imposition of redemption fine.6. The Tribunal found that the importer did not demonstrate compelling circumstances to justify non-compliance with the import restrictions. The High Court's decision restored the pre-import position, necessitating compliance with the Notification. The penalty was reduced to &8377; 38 Lakhs, considering the legal process undergone by the appellants. The redemption fine of &8377; 5 Lakhs was imposed in line with the Weston Components Ltd. case.7. The impugned order was modified to reduce the penalty and impose the redemption fine, aligning with the legal principles and precedents discussed during the proceedings.This detailed analysis covers the key issues and arguments presented in the judgment, highlighting the legal reasoning behind the Tribunal's decision.