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) requirements. The appellant imported goods below MIP without required letter of credit exemption. CESTAT confirmed DGFT's authority under Section 3 FTDR Act to impose MIP restrictions and held Customs bound by such notifications. Despite appellant's plea of unusual circumstances, confiscation was justified. However, considering unforeseen circumstances, redemption fine was reduced to Rs. 8,00,000. Appeal allowed in part.

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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 Act
The 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 appellant
The 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 situation
The 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.

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