Case Law Details
Goyal Trading Vs Commissioner of Customs (CESTAT Mumbai)
Introduction: In a significant decision, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Mumbai recently addressed the case of Goyal Trading vs. Commissioner of Customs. The central issue revolved around whether redemption fine, customs duty, and penalties should be imposed when goods are allowed to be re-exported. This article provides a comprehensive analysis of the case and its implications for importers facing similar situations.
Background of the Case: This case involves six appeals that were consolidated for decision, all arising from a common impugned order-in-appeal dated 30.10.2019. The original order-in-appeal addressed multiple appeals related to importers, including Unitec Inc., Gulab Fibres, and Goyal Trading Co., all of whom had imported Viscose Soft Waste and filed Bills of Entry. The Revenue authorities raised concerns that the importers lacked the necessary permission from the Ministry of Environment, Forest and Climate Change, as required by sub-rule (4) of Rule 12 of Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016. In response, the importers voluntarily approached the original authority, requesting permission to re-export the goods. The original authority issued orders-in-original that confiscated the goods without imposing a redemption fine but directed re-export. Additionally, penalties under Section 112(a) of the Customs Act, 1962, were levied on the appellants.
Appeals and Impugned Order: Aggrieved by the original authority’s orders, the appellants filed appeals before the Commissioner (Appeals). The Commissioner (Appeals) rejected all the appeals and upheld the orders passed by the original authority. Dissatisfied with this outcome, the appellants approached CESTAT Mumbai.
Arguments and Precedent: The learned counsel for the appellant argued that the goods had been allowed for clearance on previous occasions without any issues. They contended that their intent was not to contravene any laws while importing the goods. After the orders-in-original were issued, all appellants paid the full amount of the penalty and re-exported the goods. The appellants relied on the precedent decision of the Tribunal in the case of Siemens Public Communication Networks Ltd., which held that when goods are re-exported, neither redemption fine nor duty should be paid. The Tribunal had referred to earlier decisions and a ruling by the Hon’ble Supreme Court to support this position.
Revenue’s Counterargument: The learned Assistant Commissioner for Revenue argued that the penalty imposed, equivalent to 20% of the assessable value of the confiscated goods, was justified.
CESTAT Mumbai’s Decision: After a thorough review of the case record and the arguments presented, CESTAT Mumbai observed that the appellant’s claim that similar goods had been cleared previously was uncontested by Revenue. Furthermore, all appellants had re-exported the goods. CESTAT Mumbai cited the precedent decision in the Siemens Public Communication Networks Ltd. case, which clearly stated that when goods are allowed to be re-exported, neither redemption fine nor duty should be imposed. Consequently, penalties on importers were also not justifiable. The penalties imposed in the six appeals were set aside, and all penalties under Section 112(a) of the Customs Act, 1962, were declared unjustified.
Conclusion: The CESTAT Mumbai’s judgment in Goyal Trading vs. Commissioner of Customs underscores the importance of adherence to legal procedures and principles in cases of re-export of goods. Importers can find relief from redemption fines, customs duty, and penalties when they successfully re-export goods as per the applicable laws and regulations. This case serves as a precedent for importers facing similar situations, emphasizing the significance of compliance with statutory requirements.
In summary, this article has provided a detailed analysis of the CESTAT Mumbai’s decision in the mentioned case, highlighting the key takeaway that when goods are re-exported in accordance with the law, penalties and redemption fines should not be imposed on importers, as established by precedent decisions and legal principles.
FULL TEXT OF THE CESTAT MUMBAI ORDER
Above stated six appeals are taken together for decision since they are arising out of common impugned order-in-appeal dated 30.10.2019. The said order-in-appeal dealt with six appeals filed before learned Commissioner (Appeals) which were arising out of two orders-in-original dated 28.06.2019 passed in respect of Unitec Inc., the appellant before this Tribunal, one order-in-original dated 01.07.2019 passed against Unitec Inc., one order-in-original dated 08.07.2019 passed against Goyal Trading Co., appellant before this Tribunal, another order-in-original dated 17.07.2019 passed against Gulab Fibres, an appellant before this Tribunal and one order-in-original dated 23.07.2019 passed against Goyal Trading Co.
2. Brief facts of the case are that above stated three appellants imported Viscose Soft Waste and filed Bills of Entry. It appeared to Revenue that appellants were required to produce permission for import of said goods from Ministry of Environment, Forest and Climate Change in terms of the provisions of sub-rule (4) of Rule 12 of Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016. None of the importers could bring such permission and they approached the original authority by waiving show cause notice and personal hearing requesting permission to re-export the goods. Original authority through above stated orders-in-original confiscated the said goods and without imposing any redemption fine, directed the importers to re-export the goods. The original authority imposed penalties under Section 112(a) of Customs Act, 1962 on the appellants. Appellant, Unitec Inc. was imposed with a penalty of total amount of Rs.3,00,000/- in three orders-in-original put together. Appellant, Gulab Fibres, was imposed with a penalty of Rs.1,00,000/-. Appellant, Goyal Trading Co., was imposed with a penalty of Rs.3,50,000/- through two orders-in-original. Aggrieved by the said orders of the original authority, appellants preferred appeal before Commissioner (Appeals). Learned Commissioner (Appeals) disposed of six appeals through impugned order-in-appeal and rejected all the appeals and upheld orders passed by original authority. Aggrieved by the said order, appellants are before this Tribunal.
3. Heard the learned counsel for the appellant. Learned counsel for the appellant has submitted that during earlier occasions, similar goods were imported and allowed clearance. He has submitted that in view of the past clearances, appellants imported the said goods and, therefore, there were no intention to contravene the provisions of any of the laws while importing the goods. He has submitted that after orders-in-original were passed, all the appellants have paid full amount of penalty and re-exported the goods. He has submitted that this Tribunal has time and again held that when the goods are re-exported, penalties under Customs Act are not imposable on the appellant. For that purpose, he has relied on final order passed by this Tribunal in the case of Siemens Public Communication Networks reported at 2001 (137) ELT 623 (Tri.-Kolkata). He has submitted that this Tribunal has referred to earlier decisions of the Tribunal and also a ruling by Hon’ble Supreme Court and held that under the similar circumstances, penalty was not imposable.
4. Heard the learned AR for Revenue. Learned AR has submitted that penalty to the extent of 20% of the assessable value of the goods confiscated and ordered for re-export was imposed and the same is justifiable.
5. I have carefully gone through the record of the case and submissions made. I note that the contention of learned counsel for the appellant that earlier similar goods were allowed for clearance has not been contested by Revenue. I also note that the appellants have re-exported the goods. I also have gone through the final order in the above stated case of Siemens Public Communication Networks Ltd. For the sake of ready reference, paragraphs 5 & 6 of the said final order are reproduced below:-
“5. We have heard the submissions made from both the sides. During the course of the arguments the ld. adv. appearing for the appellant made it clear that the appellants have opted for reexport of the goods. Accordingly they have challenged the order of the Commissioner imposing a redemption fine and penalty for the said re-export, which according to the appellants is not permissible to be imposed in view of the various case laws relied upon by them. It is seen that in the case of Siemens Ltd. v. CC – 1999 (113) E.L.T. 776 (S.C.), their Lordships have held that since goods have been allowed to be re-exported, neither redemption fine nor duty was required to be paid. The Tribunal in the case of HCL Hewlett Packard Ltd. – 1997 (92) E.L.T. 367 (T) has held that no redemption fine is imposable when reexport of the goods is allowed. To the same effect is the decision of the Tribunal in the case of Padia Sales Corpn. v. CC – 1992 (61) E.L.T. 90 and in the case of Skantrons (P) Ltd. – 1994 (70) E.L. T. 635. We further find that the Tribunal in the case of G. V. International and Another – 2000 (118) E.L.T. 517 = 2000 (39) RLT 272, following the earlier decisions of the Tribunal, has set aside the orders passed by the lower authorities ordering confiscation of goods and their release on payment of redemption fine and penalty. Further in the case of Commissioner of Customs, Calcutta v. J. V. (P) Ltd. – 2000 (39) RLT 1074, the order of the lower authorities allowing re-export of the goods without fine and penalty was upheld.
6. As discussed above the issue is squarely covered in favour of the appellants by the various decisions of the Tribunal and the Hon’ble Supreme Court. Inasmuch as the Commissioner vide his impugned order has given an option to the appellants to re-ship the goods back to the supplier, we hold that the redemption fine and the penalty imposed by him was not justified. We accordingly set aside the same and allow re-export of the consignment in question without any redemption fine or penalty or duty. Appeal is thus allowed in above terms.”
As can be seen from the findings and order in the precedent decision of this Tribunal in the case of Siemens Public Communication Networks Ltd. when the goods are allowed to be re-exported, neither redemption fine nor duty was required to be paid. At the same time, penalty is also not to be imposed on the importers. I, therefore, hold that penalties imposed in these six appeals are not justified. I, therefore, set aside all the penalties imposed under Section 112(a) of Customs Act, 1962.
6. Accordingly I set aside the impugned order and allow all the above stated six appeals.
(Order pronounced in the open court)
