2026 (4) TMI 539

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....HS) 3102100 was amended. As per the revised policy, besides State Trading Enterprises, import of industrial urea/Technical grade urea shall be free subject to Actual user condition. Revenue therefore initiated investigation against the appellant which resulted in issuance of two show cause notices dated 05.07.2018 and 15.10.2019 proposing confiscation of imported Technical Grade Urea valued at Rs.27,13,158/- & Rs. 26,38,239/- respectively, by the appellant in contravention of Foreign Trade Policy, under Section 111(d) of the Customs Act,1962. Penalty under Section 112(a)(i) of the said Act was also proposed on the appellant. 1.2 These show cause notices were adjudicated by the Additional Commissioner of Customs vide order dated 29.07.2019 and dated 29.05.2000 respectively wherein, he after considering various submissions made by the appellant, ordered for confiscation of above said goods under Section 111(d) of the Customs Act,1962 but did not impose any redemption fine under Section 125 as the said goods were not available for confiscation. He also imposed penalty of Rs.2,25,000/- & Rs. 1,31,912/- respectively upon the appellant. Aggrieved with the above orders, the appellant f....

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....es, penalty under this Section cannot be imposed at goods were not imported contrary to any prohibition. * The show cause notices have not set out specific allegation against the appellant elaborating as to how contravention of Section 112 (a) has been made by them. They rely on the following cases:- a) C. Gandhi Texturising Indu. Stries Ltd. Vs. CCE-2014 (311) ELT 209 (T-Ahmd.) b) Sharpscans Prints Ltd. Vs. CC - 2007 (209) ELT 107 (T) c) A.V. Swamy Vs. CC - 2009 (240) ELT 419 (T) d) P. Kumar Vs. CC - 2009 (240) ELT 108 (T) e) Avlon Syntex Pvt. Ltd. Vs. CCE-2007 (213) ELT 706 (T) f) S. S. Gupta Vs. CC - 2001 (132) ELT 441 (T) g) Maersk India Ltd. Vs. CC - 2001 (129) ELT 444 (T) * Penalty is not imposable on them in terms of decision of the CESTAT in Marico Industries Limited case reported at 2007 (709) ELT 403 (T). In view of the above, they prayed that the impugned orders may be set aside and relief be granted to them. 3. Learned Advocate submitted that the appellant imported Technical Grade Urea in September, 2012(100 MT) and in August, 2013, (100 MT) through MMTC on high sea sales basis. The char....

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....in the case of M/s. Crozsell Vs. CC, Mundra, he prays for rejecting the appeals and upholding the impugned orders. 5. Heard the rival submissions. The short issue to be decided in this case is whether or not the appellant by importing Technical Grade Urea has violated the provisions of Foreign Trade Policy? 5.1 I find that similar issue of import of Urea purchased by M/s. Sunita Commercial Pvt. Ltd. through state trading enterprises on high sea sales basis came up for decision before this Tribunal. After analyzing the provisions of ITC (HS) policy, 2009-2015 against Heading No.3102 1000, the Tribunal found that the words used in the said heading is "Through" and not "By" STC, MMTC and Indian Potash which means that an importer can import Urea through the State Trading Corporation or State Trading Enterprises and there is no mandatory requirement that such Technical Grade Urea is imported by State Trading Enterprises only. This decision was followed in M/s. Brightglow Ventures Vs. Commissioner of Customs, Mundra vide Final Order No.A/10724-10725/2023 dated 28.03.2023. The relevant paras of the decision are reproduced below:- "4. I have carefully considered the submiss....

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....toms Appeal No. 10736 of 2020, vide order No. A/10059-10062/2023 dated 16.01.2023 decided the issue in favour of the assessee, which is reproduced below:- "4. Shri G. Kirupanandan, learned Superintendent (AR) appearing for the department reiterated the findings given in the impugned Orders. He pointed out that by virtue of purchase of Urea on High Seas from STEs and by filing Bill of Entry, the appellant became the importer and that under the Import Policy the STEs who have purchased the Urea from the foreign buyer can sell the same to the Indian buyer after clearance from Customs and that condition no. (xiv) of permission letter of Government of India, Ministry of Chemical and Fertilizers, permission was granted to the Appellant only for domestic purchase of Urea from STE. 5. On carefully considered the submissions made by both the sides and upon perusal of the case records, it emerges that the purchase from the foreign suppliers was made by STE viz. MMTC and Indian Potash Ltd and the goods were shipped by the foreign suppliers to MMTC/ Indian Potash Ltd and the Appellants have purchased the said goods on High Seas from the MMTC/Indian Potash Ltd. It can be seen ....

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....be made by the Appellant through any STE, which only means that the STE would purchase the Urea from a foreign supplier and then sell the same to the Appellant on High Seas. This is the only way in which the permission to the Appellant to import through STE can be implemented and operated. Learned Commissioner (Appeals) finding that per condition no. (xiv) of Permissions of the Government of India, Ministry of Chemical and Fertilizers, permission was granted to the Appellant only for domestic purchase of Urea from STE is also erroneous. There is absolutely no such restriction in the said condition no. (xiv). Neither does condition no.(xiv) contain any restriction that purchase shall be made only domestically from STE nor does it prohibit purchase on High Seas. All that condition (xiv) stipulates is that the Department of fertilizers has to be kept informed through the STE from whom the Urea is purchased, about the product being produced from such urea, the quantity required, etc. There is absolutely no stipulation in condition (xiv) that urea has to be purchased from STE only domestically and not on High Seas. On the contrary, the very first para of the said letter grants permissio....