TaxTMI 
TaxTMI 
2024 (12) TMI 1471
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the said Sales Contracts, the entire payment was required to be made by the importer on Cash Against Documents ('CAD') basis. 2.3 The goods were shipped to Nhava Sheva Port, India on 03.12.2019. However, the said cargo remained at the port, pending Customs clearance for reasons unknown to the unpaid seller. Based on the assurance that the importer will make the payment once they get clearance from Customs, the unpaid seller had permitted the importer to discharge the said cargo in Customs Bonded Warehouse under Section 49 of the Customs Act, 1962 (hereinafter referred as 'the Act of 1962'). 2.4 Two numbers of Writ Petitions were filed by the importer viz., being Nos. 9321 of 2018 and 13392 of 2019 before the Hon'ble High Court of Rajasthan, challenging various notifications issued by the Directorate General of Foreign Trade ('DGFT'), as under: (i) Notifications No. 04/2015-2020 and 05/2015-20, both dated 25.04.2018, which had revised the Import policy of Peas falling under CTH 07131000 from 'free' to 'restricted'; (ii) Notification dated 02.07.2018 read with 31/2015-20 and notification no. 32/2015-20 dated 30.08.2018, wherein the import policy of Yellow bea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....20, the importer had filed a Writ Petition, being No. 2504 of 2021 before the Hon'ble Bombay High Court. The said Writ Petition was kept in abeyance, as the Hon'ble Supreme Court was hearing a similar matter in Civil Appeals 2217-2218 of 2021 arising out of the SLP (C) 14633- 4634 of 2020 in the case of Union of India v. M/s. Raj Grow Impex LLP and Ors. The Hon'ble Supreme Court vide Order dated 17.06.2021 have held that the imported goods had become "prohibited goods" under Section 11 of the Act of 1962 read with Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992. However, in the said case, an option for re-export of goods was provided in the order passed by the Hon'ble Supreme Court. 2.8 Pursuant to the Hon'ble Supreme Court's Order dated 17.06.2021, the importer had made a representation dated 22.06.2021, requesting the customs authorities to allow them to reexport 12,929.70 MTs of Black Matpe, which were pending clearance since December 2019. The importer had also requested for re-export of 480 MTs of goods, wherein a Bill of Entry was filed in December 2019, but were purged in Customs EDI system. 2.9 Thereafter, the Hon'ble Bombay High Court in Writ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appellants have preferred this appeal before the Tribunal. 3. The appellants have assailed the impugned order on behalf of the unpaid seller, on the following grounds: (i) Copy of Letter dated 02.09.2021 was submitted during the course of hearing, in support of the submission that the unpaid seller was forced to pay the payment of fine and penalty and the same was strictly made under protest. Copy of challan annexed at Exhibit A, further shows that the payment was made under protest. Hence, the argument of the Departmental Representative that the payment was made voluntarily and the appeal is not maintainable is without any basis. (ii) The appellants have the locus to file the present appeal on behalf of the unpaid seller and the said fact has been accepted by the Commissioner (Appeals) in the impugned order as well. It was submitted that the aforesaid finding of the Commissioner (Appeals) has been accepted by the Department and hence the same has attained finality. (iii) The recovery of fine and penalty on re-export of goods from the appellants are bad in law, as they were the unpaid seller in respect of such goods. It was submitted that both the Ord....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndoned by the importer, i.e., M/s. Agricas LLP, collection of such penalty amount from the importer was not proper and justified. Thus, it was submitted that the Customs Department had forced the appellants to pay the penalty amount, for allowing the goods to be re-exported; even though, the said amount was required to be recovered from the concerned importer, who had imported the goods. (vii) collection of penalty amount, which was never imposed on the unpaid seller, is without any authority of law and wrongful act on behalf of the Customs Department. Thus, it was submitted that the Customs Department cannot take benefit of its own wrong. 4. Learned Departmental representative appearing for the Revenue reiterated the findings recorded in the impugned order passed by the learned Commissioner (Appeals). Further, in response to the query from the Bench, as to whether, the findings of the learned Commissioner (Appeals) regarding locus of the appellants to file the appeal has been accepted by the Department, he has stated in affirmative, stating that the same has been accepted. 5. We have heard both sides and examined the case records. The questions involved in the prese....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n Annexure A are liable for confiscation under section 111 (d) and 111 (o) of the Act. However, as the goods have been released in terms of interim relief by Hon'ble Rajasthan High Court pending outcome of Writ Petitions against bond, a redemption fine of Rs 14,00,00,000 crores (Rs Fourteen crores) is imposed in lieu of confiscation in exercise of power granted under section 125 (1) of the Act. iii. In relation to these goods I impose a penalty of Rs 7,10,00,000/ (Rs seven crores ten lakhs only) under Section 112 (a) of the Act on M/s Agricas LLP." 7. Undisputedly, in the present case, the appeal has been filed against Part A of the aforesaid adjudication order, which concerns the appellants herein, representing the unpaid seller as their agent. Part B of the aforesaid adjudication order was passed against M/s. Agricas LLP, who are the importer of the impugned goods. It is clear from the aforesaid observations of the original authority, that while the redemption fine of Rs. 3 crores has been imposed for contravention of Section 111 (d) of the Act of 1962 for redeeming the goods, penalty has been imposed specifically against M/s. Agricas LLP. In other words, while penalt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rtment. Relevant extract from the original order dated 16.08.2021, which has been accepted by the department reads as under: "7. A connected issue has arisen on account of claim of supplier Ms Arvee that they hold the title as the importer has not made any payment and hence they should be allowed to take back the goods. I find that in view of citations mentioned below it is settled that the title of the goods remain with supplier till the payment for purchase have been made if the goods were imported as per law and the importer has abandoned the goods. ....................... In the present case it is a fact that the import of impugned goods was contrary to law and impugned goods are subject matter of show cause notice. Hence, even if the suppliers have not received any payment and title of impugned goods is with them as per contract between them and the importer, they can claim back the goods only if redemption of same is allowed on payment of fine. It is also logical to hold in light of order in Sampat Raj Duggar case supra that if the payment for goods have not been done by the importer, the title post redemption of goods would have to be treated with ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....paid seller M/s. Arvee International Pte. Ltd. and the aforesaid order admittedly has been accepted by the department. Accordingly, no question can be raised on the locus of the appellants to file the present appeal against the order passed by the learned Commissioner (Appeals), upholding levy of redemption fine and recovery of penalty from the appellants, which were never proposed for imposition against them and in fact, were imposed on the importer i.e., M/s. Agricas LLP. 13. Considering the above factual matrix, the following two points arose before us for consideration i.e., whether the appellants herein had paid the amount of redemption fine under protest or otherwise; and whether, the learned Commissioner (Appeals) was correct in confirming the imposition of redemption fine on goods meant for reexport. Further, we have also been called upon to consider the issue whether, the department is justified in recovering penalty from the appellants, which admittedly was not imposed on them for contravention of any of the provisions contained in the Act of 1962. 14. On the issue raised by the learned AR with regard to the right of the appellants to file the present appeal in view....
X X X X Extracts X X X X
X X X X Extracts X X X X
....boration to find that the prohibition involved in the present matters, of not allowing the imports of the commodities in question beyond a particular quantity, was not a prohibition simpliciter. It was provided with reference to the requirements of balancing the interests of the farmers on the one hand and the importers on the other. Any inflow of these prohibited goods in the domestic market is going to have a serious impact on the market economy of the country. The cascading effect of such improper imports in the previous year under the cover of interim orders was amply noticed by this Court in Agricas (supra). This Court also held that the imports were not bona fide and were made by the importers only for their personal gains. 82. The sum and substance of the matter is that as regards the imports in question, the personal interests of the importers who made improper imports are pitted against the interests of national economy and more particularly, the interests of farmers. This factor alone is sufficient to find the direction in which discretion ought to be exercised in these matters. When personal business interests of importers clash with public interest, the former ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons of release of goods as also the quantum of penalty stand concluded with this judgment and hence, the prayer for keeping open the option of further statutory appeal stands rejected; and (f) the subject goods are held liable to absolute confiscation but, in continuity with the order dated 18.03.2021 in these appeals, it is provided that if the importer concerned opts for re-export, within another period of two weeks from today, such a prayer for re-export may be granted by the authorities after recovery of the necessary redemption fine and subject to the importer discharging other statutory obligations. If no such option is exercised within two weeks from today, the goods shall stand confiscated absolutely." 18. It is clear from the aforesaid judgement that the importers have been found guilty of importing goods, which were of 'prohibited' in nature under the FTP and the same have been held to be liable to absolute confiscation. The parties have however been given liberty to seek re-export of goods on payment of redemption fine. The question of payment of redemption fine will not arise, if the goods are abandoned and not redeemed. The findings of the Hon'ble Supreme C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r contravened any provisions of the Act of 1962 and has in fact, incurred huge expenditure for getting the goods re-exported. This expenditure is over above the expenses and/or loss, which the exporter would have incurred in the form of reduction of price of goods, payment of detention/demurrage charges for the period from the date of import of the impugned goods, till their ultimate re-exportation from the country. 22. Section 125 of Act of 1962 provides discretion to an adjudicating authority to levy a redemption fine keeping the facts of each case in mind. It is expected of the adjudicating authority to use the said discretion judiciously by levying appropriate fine in deserving cases like the one under consideration. Thus, considering the overall facts and circumstances of the case in hand, we are of the view that the quantum of redemption fine can be reduced in the interest of justice. Therefore, the impugned order is modified, to the extent of reducing the redemption fine to Rs. 5,00,000/- (Rupees Five Lakhs only). 23. In relation to the imposition of penalty, admittedly the same has been imposed on the importer viz., Agricas LLP under Section 112 (a) of the Act of 1962....