1991 (12) TMI 172 - AT - Customs

Tribunal Upholds Decision on Unauthorized Import of Banned Goods

The Tribunal upheld the adjudicating authority's decision that the import of 'Oxytetracycline HCL IP66' by M/s. Kasinka Trading was unauthorized as the ... Import Issues Involved:1. Legality of Import Licenses2. Validity of ITC Public Notice No. 21/823. Allegations of Ante-Dating Documents4. Confiscation and Redemption Fine5. Imposition of Personal PenaltiesDetailed Analysis:1. Legality of Import Licenses:The appellants, M/s. Kasinka Trading, imported six consignments of 'Oxytetracycline HCL IP66' under licenses issued during the Policy Period 1981-82. They claimed these licenses were valid for the import of the subject goods. However, the adjudicating authority concluded that the subject item was not importable under these licenses as they were issued under the old policy, and the goods arrived during the Policy Period 1982-83, when 'oxytetracycline' was listed as a non-permissible item under Appendix 4. The appellants argued that their licenses, issued under the 1981-82 policy, should not be affected by subsequent policy changes. The Tribunal referenced the Bombay High Court's decision in Climax Chemicals, which held that public notices could not affect the validity of a license issued under statutory provisions. However, the Tribunal noted that the High Court did not consider the condition in the licenses stating that imports are subject to prohibitions or regulations in force at the time of arrival. The Tribunal upheld the adjudicating authority's decision, emphasizing that the import was unauthorized as the goods were banned at the time of arrival.2. Validity of ITC Public Notice No. 21/82:The appellants contended that ITC Public Notice No. 21/82, which banned the import of salts of oxytetracycline, was issued on 19-4-1982 and should not have retrospective effect. They argued that the public notice was more of a clarification than a new imposition of a ban. The Tribunal, however, upheld the validity of the public notice, stating that policy provisions could be amended by such notices. The Tribunal referred to the Supreme Court's decision in Andhra Industrial Works, which upheld the government's right to amend policy provisions through public notices.3. Allegations of Ante-Dating Documents:The adjudicating authority found that the Letter of Credit (L/C) for the import was ante-dated to 8-4-1982, while it was actually opened on 5-5-1982. The appellants produced a letter dated 17-4-1982 from the foreign supplier, which mentioned the L/C number, to support their claim. However, the Tribunal found discrepancies in the evidence, such as corrections in the bank's day book and the timing of correspondence, which suggested that the L/C was indeed ante-dated. The Tribunal concluded that the contract and the L/C were fabricated to circumvent the ban imposed by the public notice.4. Confiscation and Redemption Fine:The adjudicating authority ordered the confiscation of the goods under Section 111(d) of the Customs Act and imposed a redemption fine. The Tribunal upheld this decision, stating that the import was unauthorized and the goods were liable to confiscation. The quantum of the redemption fine was also confirmed as proportionate to the margin of profit.5. Imposition of Personal Penalties:Personal penalties were imposed on M/s. Kasinka Trading, M/s. Jaggat Singh Sons and Bros., and Mr. Santokh Singh, the Bank Manager. The Tribunal upheld the penalties, noting that M/s. Kasinka Trading attempted to import banned goods with ante-dated documents, M/s. Jaggat Singh Sons and Bros. abetted the transaction, and Mr. Santokh Singh was involved in the ante-dating of the L/C. However, the Tribunal reduced the penalty on Mr. Santokh Singh from Rs. 5000 to Rs. 2000, considering the penalties imposed on other parties and the consequences he was likely to suffer.Conclusion:The Tribunal dismissed the appeals of M/s. Kasinka Trading and M/s. Jaggat Singh Sons and Bros., while partly allowing the appeal of Mr. Santokh Singh by reducing his penalty. The import was deemed unauthorized due to the goods being banned at the time of arrival, and the penalties were upheld as justified, with a minor reduction for Mr. Santokh Singh.