TaxTMI 
TaxTMI 
2021 (1) TMI 1110
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....al is disposed of by allowing redemption of impugned goods on payment of fine of Rs. 12,00,000/- (Rupees Twelve Lakh only) in lieu of confiscation under Section 125 of the Customs Act, 1962. However, penalty of Rs. 4,00,000/- (Rupees Four Lakhs only) imposed by the Commissioner is upheld." 3. Hence, Customs Appeal No.13 of 2020 is at the instance of Importer challenging the levy of penalty of Rs. 4 lakhs and Customs Appeal No.14 of 2020 is at the instance of Revenue questioning the release of subject goods on payment of redemption fine of Rs. 12 lakhs. 4. The undisputed circumstances leading to the filing of Customs Appeals are stated thus:- The Union of India in exercise of power under Section 3 of Foreign Trade (Development and Regulation) Act, 1992 referred to as FTDR Act issued Notification No.37/2015-2020 dated 18.12.2019. The said notification is followed by Notification No.1225(E) dated 28.3.2020. The notifications have bearing on the submissions made by the counsel appearing for the parties and we find it useful to excerpt the respective notifications hereunder: Government of India Ministry of Commerce & Industry Department of Comme....
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.... (Department of Commerce) NOTIFICATION New Delhi, the 28th March, 2020 S.O.1225(E).-In exercise of powers conferred by section 3 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020 as amended from time to time, the Central Government hereby notifies the annual quota for the fiscal year 2020-2021 for the items of Chapter 7 of the Indian Trade Classification (Harmonized System), 2017, Schedule-I (Import Policy) as under: Exim Code Item Description Import Policy Quota for fiscal year 2020-2021 0713 10 10 Yellow Peas Restricted 1.5 lakh MT (the quantity of each category of peas will be notified shortly) 0713 10 20 Green Peas Restricted 0713 10 90 Other Restricted 0713 31 90 Moong (Beans of the SPP Vigna Radiata (L) Wilezek). Restricted 1.5 lakh MT 0713 60 00 Tur/Pigeon peas (Cajanus Cajan) Restricted 4 lakh MT 2. The import policy conditions such as Minimum import price (MIP) of Rs. 200/- and port restriction through Kolkata sea port only for all peas (07131010, 07131020 & 07131090) as....
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....fer Petitions, subject to E above (What is not decided) are dismissed. Writ Petitions filed by the intervenors before the respective High Courts shall stand dismissed in terms of this decision. Pending application(s), if any, also stand disposed of in the above terms. No order as to costs." 6. Thus the imports pursuant to interim orders made in different Writ Petitions were allowed to be dealt with under the Customs Act 1962. The subject import is not one of the instances covered by the judgment of Supreme Court in Agricas LLP. The Ministry of Commerce & Industries Department, Government of India issued notification dt.16.4.2020 specifying the quantity of import for each category of peas for fiscal year 2020-2021 which reads thus: MINISTRY OF COMMERCE AND INDUSTRY (Department of Commerce) NOTIFICATION New Delhi, the 16th April, 2020 S.O.1260(E).-In exercise of powers conferred by Section 3 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, the central Government, in pursuance to the Notification S.O. 1225(E) dated 28th March, 2020, hereby....
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....d 18.12.2020 as modified in the notification dated 28.3.2020 which are: I) Import subject to annual (fiscal) year quota of 1.5 lakh metric tonnes. II) II) Imports subject to minimum import price of Rs. 200/- and above CIF per kg.; And III) Import is allowed through Calcutta Seaport only. The Commissioner of Customs takes note of the affidavit dt.20.6.2020 filed by the Union of India before the Supreme Court in Transfer Petition No.496-509 of 2020 and reasons for restriction on quantity, minimum import price and also entry port only as Calcutta Port; orders confiscation of subject goods and imposes penalty on importer. The operative portion of the order reads thus: "Under Section 125 of the Customs Act, 1962, releasing prohibited goods in lieu of fine is not obligatory and the stand of the Union Government before the Hon'ble Supreme Court cannot be ignored by this adjudicating authority. More so, when the supply of the peas and pulses in the domestic market would have an adverse impart on the economy and would defeat the purposes of the restrictions imposed. Therefore, I hold that peas imported against the policy restrictions are liable to pen....
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....of Notification dt. 18.12.2019 read with 28.03.2020 are substantially same or similar to the notifications considered by the Apex Court in Transfer Petition (Civil) Nos.496-509/2020. The challenge at the instance of traders to the notification dated 29.03.2019 was rejected by the Apex Court. The DGFT and the Union of India being conscious of various factors concerning Pulses for import need necessity of protecting farmer's interest and subsisting stock, protection of price under FTDR Act from time to time. There is no fresh challenge to the Notification dated 18.12.2019 and 28.03.2020 by any stake holder. The Customs Commissioner, therefore, has rightly considered the circumstances leading to the judgment in Agricas LLP case(supra), the findings recorded therein and has taken comprehensive view ordering confiscation of subject goods. He argues that exercise of discretion by the Commissioner in any other manner would defeat the Exim Policy, Notification in vogue, the judgment of the Apex Court in Agricas case and would adversely affect the interest of farmers in the Country. It is also argued that the Tribunal, by ordering release of goods on payment of redemption fine has opene....
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....d for import of restricted/prohibited goods by ordering release of goods by the Appellate Tribunal. 11. It is next contended that the importers interested in import of subject goods must comply with the three conditions stated supra, in contrast an importer disregarding every condition on its own volition, imports the goods and by giving a very liberal approach, the release of goods is ordered by the Tribunal. As a matter of fact, it is stated that the competent authority, in response to the trade notice dated 21.04.2020, has not issued licence to any of the applicants. There is no discrimination in granting Licences to the applicants for import of green peas etc. and an informed decision is taken by the authority not to operate or grant licences in the restricted quantity of 1.5 lakh MT by keeping in perspective the available stocks in the country. He submits that these matters do not fall within the ambit of judicial review, much less, for the Appellate Tribunal to completely ignore relevant considerations and direct release of goods. The DGFT restricted import of subject goods. A restriction should be read as something which requires compliance of certain conditions and impor....
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....each of the import/export conditions are case specific and distinguishable. He prays for allowing Customs Appeal No.13/2020. 13. Learned counsel P.A Augustine argues that Section 125 of Customs Act, 1962 provides that even if the goods are found liable for confiscation and the import is prohibited by law, still the adjudicating authority "may" allow redemption of the goods on payment of redemption fine. The distinction is that goods other than prohibited by law, if found liable for confiscation, it is mandatory to release goods. The Customs Act does not define restricted goods. The view of Apex Court in Atul Automation Pvt.Ltd (supra) is that option at the discretion of revenue is to redeem the goods and mandatory. Therefore, the Appellate Tribunal has given effect to the law declared by Apex Court in Atul Automation Pvt.Ltd. (supra). The judgment of Apex Court in Agricas LLP was concerned with the notification issued by DGFT restricting import of pulses etc. But the said decision cannot be treated as in any way declaring that import of such goods is prohibited and liable for absolute confiscation under Section 125 of Customs Act 1962. The reliance placed by the Revenue on Agric....
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....s warranted in the circumstances of the case or the penalty is levied capriciously and arbitrarily? Question: 1 16. The importer is actual user of subject goods. The importer is assumed to be familiar with the requirements of the law and the procedure followed for granting import licence. The goods are imported and Bill of Entry is filed for customs clearance. 17. This Court for the purpose of appreciating the case of importer must keep in perspective the judgment of Apex Court in Agricas LLP case. The judgment of Apex Court in Agricas LLP case considered the grounds raised against Notifications impugned therein, rejected the prayer. The following paras need to be excerpted hereunder : "The effect of Notifications, as noticed and beyond doubt, is to bring the specified commodities from free to the restricted category and therefore the imports in question would require a prior authorisation for import. The requirement of licence is nothing but authorisation. Therefore, in terms of paragraph 2.10, the imports of the specified commodities would only be by the 'actual user' unless the 'actual user' condition was specifically dispensed with or diluted b....
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....enge made by the importers. The imports, if any, made relying on interim order(s) would be held to be contrary to the notifications and the trades notices issued under the FTDR Act and would be so dealt with under the provisions of the Customs Act 1962. The Writ Petitions subject matter of the Transfer Petitions, subject to E above (What is not decided) are dismissed. Writ Petitions filed by the intervenors before the respective High Courts shall stand dismissed in terms of this decision. Pending application(s), if any, also stand disposed of in the above terms. No order as to costs." 18. Thereafter notifications dated 18.12.2019 and 28.3.2020 stipulating further policy conditions were issued by the Government. As a sequel for operating policy, trade notice was issued on 21.4.2020, calling for application for grant of import licence. The importer on 22.4.2020 applied for licence, It filed the bill of entry on 30.6.2017 before Customs, Cochin Port. The importer claims release of goods on payment of redemption fine notwithstanding restriction/prohibition on import of goods. This Court before proceeding to consider the manner of exercise of discretion in different perspectives by t....
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....ubject goods is operated through Calcutta Sea Port alone and in other words, import through other ports in the country is prohibited. The importer in this case intends to import through Cochin Port, which is a Port prohibited to import the subject goods. 21. The Appellate Tribunal, as already noted, appreciating Exim Policy notification dated 18.12.2019 and 28.3.2020, noted that the subject goods have acquired the nature of prohibited goods in terms of Section 2(33) of Customs Act, 1962. However in paragraph 18 of the judgment under appeal treated the subject goods in the nature of restricted goods and held that release can be allowed on payment of redemption fine in lieu of confiscation. In the considered view of this Court the Appellate Tribunal is not consistent in appreciating whether the subject goods should be treated as restricted goods or prohibited goods. Still the Tribunal proceeded to direct release of goods on payment of redemption fine. Be that as it may, the Appellate Tribunal as one of the supporting reasons relies on the judgment of the Bombay High Court in M/s. Harihar Collections case and recorded that denial of release to subject importer would be travesty of ....
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....e in lieu of confiscation or confiscation. This Court is of the view that the exercise of discretion and jurisdiction either by the adjudicating authority or by the Appellate Tribunal ought not to be moulded by a cast. The jurisdiction under Sections 111 (d) and 125 of Customs Act, 1962 is read with the provisions of FTDR Act, 1992, foreign trade policy and the notifications issued by the Government from time to time. The Supreme Court in Agricas LLP has upheld notification dated 29.3.2019 issued imposing restriction on import of pulses described therein. The notifications dated 18.12.2019 and 28.03.2020 which have bearing to the issue on hand are substantially same and similar, but operating for subsequent fiscal years with a few additional parameters. The combined exercise of authority and discretion by Customs Commissioner etc. in these matters, conform to the requirements of judicial discretion. The discretion or power is exercised combining the relevant provision in the Act, notification and facts prevailing on the date of consideration etc. The authorities are guided by the information available to them in a given case. 25. We hasten to add, that if in every case goods are....