Appellate tribunal reduces penalties for miller importing 'Canada Whole Green Peas' under specific tariff heading

The appellate tribunal partially allowed the appeal filed by a miller challenging the fine and penalty imposed by the adjudicating authority for importing 'Canada Whole Green Peas' under a specific tariff heading with exemption claim. The tribunal reduced the redemption fine to Rs. 2.5 lakhs and the penalty to Rs. 1 lakh, citing excessive penalties for the violation of quantitative restrictions. The tribunal's decision modified the fines, providing relief to the appellant in the penalty imposition.

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Issues:
1. Import of goods under specific tariff heading and exemption claim.
2. Compliance with Mandatory Compliance Requirements/Appraising Instructions.
3. Violation of Foreign Trade Policy leading to confiscation of goods.
4. Challenge to fine and penalty imposed by adjudicating authority.
5. Interpretation of transitional arrangements under FTP and Handbook of Procedure.
6. Consideration of redemption option and penalty reduction in appeal.

Issue 1: Import of goods under specific tariff heading and exemption claim:
The appellant, a miller, imported 'Canada Whole Green Peas' from Canada under Tariff Heading 0713 3120, claiming exemption under Notification No. 002/2017. The Revenue raised concerns regarding import restrictions, minimum import price, and annual quota, leading to a query for import authorization from DGFT due to discrepancies in declared value.

Issue 2: Compliance with Mandatory Compliance Requirements/Appraising Instructions:
The adjudicating authority observed that although the Bill of Lading predated the Notification, the Bill of Entry was filed after the issuance of the Notification, highlighting the lack of import authorization as mandated under the FTP. This non-compliance led to the confiscation of goods under Section 111(d) of the Customs Act, 1962.

Issue 3: Violation of Foreign Trade Policy leading to confiscation of goods:
The authority determined that the goods were in transit before the amendment of the Import Policy, making the amended Notification inapplicable. The adjudicating authority ordered confiscation but allowed redemption on payment of a fine and imposed a penalty, leading to the appellant's challenge in the appeal.

Issue 4: Challenge to fine and penalty imposed by adjudicating authority:
The appellant contested the fine and penalty imposed, citing precedents where such penalties were reduced. The Revenue relied on a High Court decision setting aside a similar redemption option, emphasizing the authority's findings on the application of import policies.

Issue 5: Interpretation of transitional arrangements under FTP and Handbook of Procedure:
The adjudicating authority referenced relevant provisions of the FTP, transitional arrangements, and Handbook of Procedure to determine the date of import based on the Bill of Entry. The authority concluded that the minimum import price and port restrictions were not applicable due to the timing of the import.

Issue 6: Consideration of redemption option and penalty reduction in appeal:
The appellate tribunal reviewed the redemption fine and penalty, finding them excessive given the specific violation of quantitative restrictions. The tribunal reduced the redemption fine to Rs. 2.5 lakhs and the penalty under Section 112 to Rs. 1 lakh, allowing the appeal in part and modifying the fines accordingly.

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