2024 (6) TMI 309 - AT - Customs

Steel coils worth USD 515-540/MT confiscated for importing below minimum price without exemption letter

CESTAT Bangalore upheld confiscation of 530 MT hot dipped galvanized steel coils valued USD 515-540/MT for non-compliance with minimum import price (MIP) ... Levy of Redemption fine - clearance of 530 MT of hot dipped galvanized steel coils of varying sizes with values ranging between USD 515-540/MT - applicability of minimum import price for iron and steel goods - HELD THAT:- As per the Section 3 of the FTDR Act, the DGFT is empowered to impose restrictions for import and accordingly the minimum import price imposed by the DGFT vide the notification is also justified. The notification 38/2015-20 is issued under Section 3 of the FTDR Act, and therefore, the appellant cannot read into it that it has not been issued under sub-clause (2) of Section 3. Moreover, the Trade Notice referred by the Revenue which was issued by DGFT categorically states that the imported items must have a unit CIF value equal to or above the MIP. As per para 2 of the notification letter of credit is also essential to claim the exemption. The appellant admits that on the date of import the notification was applicable and the letter of credit was also not available to claim the exemption and his only plea is that considering the unusual circumstances under which the import happened the goods are not liable for confiscation. The Customs is legally bound by the notifications issued by the DGFT and therefore, the notification which is applicable on the date of import cannot be ignored as has been held by the Hon’ble High Court of Madras in the case of Salmag Enterprises Versus Addl. Commr. of Cus. (Adj), Tuticorin [2021 (6) TMI 180 - MADRAS HIGH COURT]. The Tribunal in identical set of facts in the case of M/S SIEMENS GAMESHA RENEWABLE POWER PVT. LTD. VERSUS C.C. MUNDRA [2018 (8) TMI 371 - CESTAT AHMEDABAD] as submitted by the Revenue, held that the Commissioner was justified in imposing redemption fine. Taking into consideration the unforeseen circumstances as explained above by the appellant, it is fair to reduce the redemption fine to Rs. 8,00,000/- - Appeal allowed in part. Issues:1. Interpretation of minimum import price notification under Section 3 of the FTDR Act.2. Justification of redemption fine imposed on the appellant.3. Applicability of notification exemptions to the appellant's situation.Analysis:Issue 1: Interpretation of minimum import price notification under Section 3 of the FTDR ActThe appellant imported goods subject to a minimum import price notification issued by the DGFT. The Commissioner held the goods liable for confiscation under Section 111(d) of the Customs Act. The appellant argued that they had completed all formalities before the notification was issued, citing mitigating circumstances. The Tribunal acknowledged the DGFT's power under Section 3 of the FTDR Act to regulate imports, emphasizing that the Customs is bound by such notifications. The Tribunal referred to a High Court case where it was held that Customs should seek clarification from DGFT on import restrictions. The Tribunal upheld the notification's applicability and reduced the redemption fine based on unforeseen circumstances.Issue 2: Justification of redemption fine imposed on the appellantThe AR argued that the redemption fine imposed was justified due to the violation of the minimum import price condition. The Tribunal referred to a previous case where a redemption fine was upheld for a similar violation. However, considering the circumstances presented by the appellant, the Tribunal reduced the redemption fine to Rs. 8,00,000.Issue 3: Applicability of notification exemptions to the appellant's situationThe appellant claimed exemption from the notification based on factors such as being a 100% EOU unit and importing under advance authorization. However, the AR relied on a trade notice clarifying that goods must meet the minimum import price criteria. The Tribunal emphasized that the notification exemptions required compliance with specified conditions, including the availability of a letter of credit before the notification's issuance.In conclusion, the Tribunal partially allowed the appeal, reducing the redemption fine due to unforeseen circumstances but upholding the notification's applicability and the justification for the fine based on violation of the minimum import price condition.