Case Law Details
Commissioner of Customs (Port) Vs Rahul Agro Industries (CESTAT Kolkata)
CESTAT Kolkata taking a sympathetic view further reduced redemption fine and penalty on import of green peas due to extension of restriction. Redemption fine and penalty reduced to Rs. 25 Lakhs each.
Facts- The issue involved in the present Appeal is Importation of Green Peas and Yellow Peas. As per the import policy under chapter 7 of ITC (HS) 2017, schedule-1 (Import Policy) the import of Pigeon peas (Cajanus Cajan) / Toor dal till 05.08.2017 and moong dal/Urad dal till 21.08.2017 and Urad/Moong in split and other forms till 05.08.2017 was categorized as free.
Initially notification no. 19/2015 dated: 05.08.2017 revised the Import policy of items of chapter 7 of the ITC (HS) 2017, schedule-1 with respect to Pigeon peas/ Toor dal from free to restricted with annual (Fiscal year) quota of 2 lakhs MTs. Notification no.22/2015 dated: 21.08.2017 amended the Import policy of Beans of the species Vigna Mungo (L) Hepper (Moong Dal) from free to restricted with annual (Fiscal year) quota of 3 lakhs MTs. From implementation of notification no.22/2015-2020 dated: 21.08.2017 a Trade Notice No. 19/2017 dated: 25.10.2017 was issued.
Further Notification No.04/2015-2020 dated: 25.04.2018 was issued by which Yellow Peas under EXIM code 07131000 was revised from Free to Restricted for a period of three months only but subsequently extended till 31.12.2018, vide Notification 15/2015-2020 dated: 02.07.2018, notification 32/20152020 dated: 30.08.2018, Notification no. 37/2015- 2020 dated: 28.09.2018. Trade Notices No.06/2018 and 12/2018 both dated: 18.05.2018 and 19/2018-2019 dated: 05.07.2018 were also issued by DGFT setting out the procedure of registration of contracts and to the effect that only refiners and millers are allowed to import Peas and Pulses as per specified quota.
In the mean time the Appellant Imported 12 consignments of Green Peas/Yellow Peas through Kolkata Port which were held up. Based on Commissioner (A) order reducing redemption fine and penalty in the matter, revenue has preferred the present appeal.
Conclusion- Held that we find that although Ld. Commissioner (Appeal) has reduced the redemption fine and penalty but in the facts and circumstances of the case as appellant being regular importer and as the earlier notification made the restrictions only up to 30.06.2018 which was extended by notification dated 28.09.2018 which means that there is a gap of three months wherein restriction was not in operation for import of green peas. In that circumstances, the appellant has imported the goods from the foreign suppliers which were landed after extending restrictions. Further, the respondent approached the Hon’ble High Court and challenged the extension of restriction which was stayed by the Hon’ble High Court, in that circumstances, although the goods are restricted as held by the Hon’ble Apex Court but for imposing redemption fine and penalty, a sympathetic view is to be taken. Therefore, we further reduce the redemption fine and penalty on the Respondent to Rs. 25,00,000/- each.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The Revenue is in appeal against the impugned order wherein Ld. Commissioner (Appeal) has reduced the redemption fine and penalty upon the Respondent as Rs.52,00,000/- and Rs.50,00,000/- respectively.
2. The respondent has also filed cross objection to the appeal filed by the Revenue praying that redemption fine and penalty be reduced.
3. The facts of the case are as under:
“1. The issue involved in the present Appeal is Importation of Green Peas and Yellow Peas. As per the import policy under chapter 7 of ITC (HS) 2017, schedule-1 (Import Policy) the import of Pigeon peas (Cajanus Cajan) / Toor dal till 05.08.2017 and moong dal/Urad dal till 21.08.2017 and Urad/Moong in split and other forms till 05.08.2017 was categorized as free.
2. Initially notification no. 19/2015 dated: 05.08.2017 revised the Import policy of items of chapter 7 of the ITC (HS) 2017, schedule-1 with respect to Pigeon peas/ Toor dal from free to restricted with annual (Fiscal year) quota of 2 lakhs MTs. Notification no.22/2015 dated: 21.08.2017 amended the Import policy of Beans of the species Vigna Mungo (L) Hepper (Moong Dal) from free to restricted with annual (Fiscal year) quota of 3 lakhs MTs. From implementation of notification no.22/2015-2020 dated: 21.08.2017 a Trade Notice No. 19/2017 dated: 25.10.2017 was issued.
3. Further Notification No.04/2015-2020 dated: 25.04.2018 was issued by which Yellow Peas under EXIM code 07131000 was revised from Free to Restricted for a period of three months only but subsequently extended till 31.12.2018, vide Notification 15/2015-2020 dated: 02.07.2018, notification 32/20152020 dated: 30.08.2018, Notification no. 37/2015- 2020 dated: 28.09.2018. Trade Notices No.06/2018 and 12/2018 both dated: 18.05.2018 and 19/2018-2019 dated: 05.07.2018 were also issued by DGFT setting out the procedure of registration of contracts and to the effect that only refiners and millers are allowed to import Peas and Pulses as per specified quota.
4. In the mean time the Appellant M/S. Rahul Agro Industries, Jhalkari Nagar, Alwar gate, Ajmer, Rajasthan 305001, who were regular Importer of Peas for trading purpose, had a firm contract with the Foreign supplier M/S. Total Trade Global FZE, to export to the Appellants to supply of 90,000 MTs. of Yellow peas and against Contract. No. TIGF/YP/18-19/68 dated: 06.12.2018 for supply of 27,000 MTs. The Appellant Imported 12 consignments of Green Peas/Yellow Peas through Kolkata Port which were held up.
6. Since all the consignments were detained by Customs, M/S. Rahul Agro Industries, challenged the validity of the Notifications and Trade Notices by virtue of which, the import of peas and pulses were made from “free” to “restricted” before the High Court, Rajasthan at Jaipur by Writ petition no. 27441 of 2018, making the Commissioner of Customs (Port), Kolkata and DGFT as the respondents.
7. The Hon’ble High Court, Rajasthan passed an interim order dated: 18.12.2018 which is reproduce as below;
“This Court considering the prayer of the petitioner and keeping in mind the earlier order passed, deems it proper to stay the operation and effect of impugned notification dated 25th April, 2018, 2nd July, 2018 (Annex 3 & 4) and impugned trade notice No.12/2018 dated 18th May, 2018 (Annex.6) trade notice bearing no. 19/2018 dated 5th July, 2018 (Annex.7) and further operation of the notification dated 30th August, 2018 (Annex.12) and notification dated 28th September, 2018, shall remain stayed. This Court further allows the petitioner to import quantity of the commodities like Yellow and green peas for which orders have already been placed and the registration may also be issued, subject to the final outcome of the writ petition”. Further the Hon’ble High Court passed an order on 01.06.2019, in the above said writ petition passed an interim order directing the respondents to release the commodity (Green Peas) forthwith to the petitioner.
8. In the meantime, the Hon’ble High Court of Gujarat at Ahmadabad vide its order dated: 19.12.2018 has upheld the validity of the impugned Notifications by dismissing the Special Civil Applications No.16765 of 2018, 17290 of 2018, 17573 of 2018 and 17664 of 2019 challenging the validity of the said Notifications and similar view of taken by the Hon’ble High Court of Madhya Pradesh, Bench at Indore in the case of M/S. Siddhi Vinayak Vs Union of India (writ petition No.21438 of 2018) vide its order dated: 25.10.2018. Moreover, M/S. Kusum Agency has challenged the said order of the Hon’ble High Court, Gujarat before the Hon’ble Supreme Court by preferring Special leave to Appeal (C) No. 1922/2019. The Hon’ble Supreme Court by its order dated: 28.01.2019 has been pleased to dismiss the said Special Leave.
9. As the Hon’ble Supreme Court now vide its judgment in the Union of India & Ors Vs. Agricas LLP & Ors [Transfer Petition (Civil) Nos. 496-509 of 2020 & Anr.] has upheld the validity of the impugned notifications, the import of the impugned goods is restricted and hence the impugned goods are liable for confiscation under section 111(d) of the Customs Act, 1962. The Importer, for his act of importing the goods, which are liable for confiscation under the section 111(d) of the Customs Act, 1962 has rendered the importer accountable for penalty under section 112(a) of the act ibid.
10. Thereafter based on the order of Honorable Supreme Court the respondents M/S. Rahul Agro Industries received a Show Cause Notice and adjudication procedure was followed. Vide Order-In-Original No: KOL/CUS/JC/PORT/Gr.1/44/2021 dated: 19.07.2021, the goods were held liable to confiscation u/s 111(d). However, goods were allowed to be re- deemed on payment of fine of Rs.2, 10,00,000/- and penalty of Rs.4, 00, 00,000/- by the Joint Commissioner of Customs (Port) as the Adjudicating authority.”
4. Against the said order, the Revenue is in appeal and the Respondent has also filed cross objection.
5. The Ld. Authorized Representative submits that the Ld. Commissioner (Appeal) has not given any observation as to why he has reduced the fine and penalty amount and how he ascertained the fine and penalty amount whereas the Adjudicating Authority has clearly ascertained the profit margin for calculation of redemption fine.
6. Therefore, the order of the Adjudicating Authority is to be restored. He also relied on the decision of this Tribunal in the case of Shri Amman Dhall Mill Vs. Commissioner of Customs, Cochin, 2021 (376) E.L.T. 174(Ker.).
7. Therefore, he prayed that impugned order is to be set aside.
8. On the other hand, the Respondent is praying that as imports were made during the period 22.10.2018 to 28.12.2018 and the Respondent has challenged the notification extending the restriction up to 31. 12.2018 and the Hon’ble High Court was pleased to allow the goods to be released by staying the operation of the notification No. 4/2018-20 dated 25.04.2018 amended by notification 37/2018-20 dated 28.09.2018.
9. Therefore, he prayed that as appellant has suffered detention and dumarage charges during the impugned period, moreover, the appellant was forced for litigation to release the goods in that circumstances, it is prayed that redemption fine and penalty be reduced.
10. Heard the parties. Considered the submissions.
11. We find that in this case the Ld. Authorized Representative has relied on the decision of this Tribunal in the case of Shri Amman Dhall Mill Vs. Commissioner of Customs, Cochin, 2021 (376) E.L.T. 174(Ker.). In the said case the appellant did not challenge the notification and imports took place on 23.06.2020 which was almost two years of the operation of the notification no. 37/2015-2020 dated 28.09.2018.
12. In that circumstances, this Tribunal held that the redemption fine with penalty imposed by the Adjudicating Authority is correct. But in this case, the appellant has challenged the notification and after litigation ,initially, the operation of the notification was stayed by the Hon’ble High Court of Rajasthan and thereafter the validity of the notification was upheld by the Hon’ble Apex Court in the case of Union of India Vs. Agricas LLP, 2020 (373) E.L.T. 752 (S.C. ).
13. In that circumstances, it is to be seen that during the pendency of the proceedings, various authorities had considered the stay of operation of the impugned notification and in one such case the Adjudicating Authority i.e. Commissioner of Customs, Chennai-II, Chennai vide order dated 23.03.2020 has refrained from imposing redemption fine on the importer and a nominal penalty of Rs. 50,000/- was imposed.
14. In the impugned order also, the Ld. Commissioner (Appeal) has considered the submission made by the Respondent and proceeded to hold that redemption of final penalty are on higher side and reduced the redemption from penalty. But we find that although Ld. Commissioner (Appeal) has reduced the redemption fine and penalty but in the facts and circumstances of the case as appellant being regular importer and as the earlier notification made the restrictions only up to 30.06.2018 which was extended by notification dated 28.09.2018 which means that there is a gap of three months wherein restriction was not in operation for import of green peas. In that circumstances, the appellant has imported the goods from the foreign suppliers which were landed after extending restrictions. Further, the respondent approached the Hon’ble High Court and challenged the extension of restriction which was stayed by the Hon’ble High Court, in that circumstances, although the goods are restricted as held by the Hon’ble Apex Court but for imposing redemption fine and penalty, a sympathetic view is to be taken. Therefore, we further reduce the redemption fine and penalty on the Respondent to Rs. 25,00,000/- each. (Rs. Twenty Five lacs each).
15. In these terms, the appeal filed by the Revenue and the cross objection filed by the Respondent are disposed of.
(Order Pronounced in Open court on 03.09.2024)
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