Shri Amman Dhall Mill Vs Commissioner of Customs (Kerala High Court)
Conclusion: Appellate Tribunal committed serious error in law by ordering release of Canadian Green Peas under Section 125 on payment of redemption fine as by holding that release of goods was the only option to Customs Commissioner in the case on hand the language of Section 125 of Customs Act was fully liberalised which was against the relevant notifications, the mandate of FTDR Act and Customs Act 1962.
Held: Assessee-importer applied for issue of license for import of 200 metric tonnes of green peas through Cochin Port. The importer, before actual grant of licence imported goods and filed Bill of Entry for clearance of goods declared as Canadian Green Peas henceforth referred as the “subject goods”. As per the declaration in Bill of Entry the quantity declared is 210 metric tonnes with declared assessable value of Rs.79,28,444/-. Tribunal observed that the subject goods have been imported in violation of the conditions of the Exim Policy Notifications and due to this, the goods had acquired the nature of prohibited goods in terms of Section 2(33) of Customs Act, 1962 and had become liable for confiscation in terms of Section 111(d). Thereafter, Tribunal formulated the question in appeal as to whether the adjudicating authority had an option to allow such goods i.e. Prohibited Goods to be redeemed on payment of redemption fine in lieu of confiscation. It was held that exercise of power and discretion under Section 125 of Customs Act 1962, were specific and generally governed by the applicable policy, notification etc. Notification dated 18.4.2019 stipulated restriction on import of a quantity of 1.5 lakh M.T only; stipulated minimum import price of Rs.200/- and above CIF per kg and the import was allowed through Calcutta Sea Port only. These were the conditions which the licensee for import of the goods was expected to conform. The exercise of above discretion by Customs Commissioner was the question for consideration before the Appellate Tribunal. The Appellate Tribunal on the contrary, as already noted, considered matters not completely germane for appreciating the mode and manner of exercise of authority by the Commissioner of customs, but, however, recorded that the subject goods could be treated as restricted goods and could be released on payment of redemption fine. in Customs Appeal No.14/2020. Tribunal fell in clear error of law. By holding that release of goods was the only option to Customs Commissioner in the case on hand the language of Section 125 of Customs Act was fully liberalised. The reasoning of Tribunal was adopted both by other primary authority/Appellate Tribunal, then Exim policy, notifications were defeated and opens floodgates of the import Green Peas, and such contingencies were commented by Supreme Court in Agricas Case. The consideration of Appellate Tribunal was illegal, ignored relevant notifications, the mandate of FTDR Act and Customs Act 1962. In matters of this nature, such approach would go contrary to the object sought to be implemented by the authorities, in whom power was conferred particularly in matters of import, export, price etc. Hence, Appellate Tribunal committed serious error in law by ordering release of goods under Section 125.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
Heard learned ASG N.Venkataraman and learned Adv.P.A.Augustine for parties.
2. The instant Customs Appeals are under Section 130 of the Customs Act, 1962 (for short ‘Act 1962) and are at the instance of M/s Shree Amman Dhal Mill/Importer and the Commissioner of Customs, Kochi/Revenue. For convenience, the parties are referred to as ‘Importer’ and ‘Revenue’ respectively. The appeals are directed against final order No. 20845/2020 dated 16.12.2020 of the CEST Appellate Tribunal, South Zonal Bench, Bangalore. The appellate Tribunal through the impugned order dated 16.12.2020 held and directed as follows:
“In view of the above, the appeal 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 CUS.Appeal Nos.13 & 14 of 2020 4 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 Commerce
Directorate General of Foreign Trade
Notification No.37/2015-2020
New Delhi, dated: 18th December, 2019
Subject: Amendment in import policy and Policy condition under HS code 0713 1000 of Chapter 7 of ITC (HS), 2017, Schedule-I (Import Policy).
S.O.(E): In exercise of powers conferred by Section 3 of FT (D&R) Act, 1992, read with paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central Government hereby amends import policy and policy conditions under HS code 0713 1000 of Chapter 7 of ITC (HS), 2017, Schedule-(Import Policy), as under:
