Custom, Excise & Service Tax Tribunal
Cc, Hyderabad vs M/S. Hasten Stores on 27 December, 2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing: 27/12/2010
Date of decision:27/12/2010
Appeal No.C/89/09
(Arising out of Order-in-Appeal No.53/2008(H-II)[D]Cus dt. 31/10/2008 passed by Commissioner(Appeals), Hyderabad )
For approval and signature:
Honble Mr. M.V.Ravindran, Member(Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
CC, Hyderabad
..Appellant(s)
Vs.
M/s. Hasten Stores
..Respondent(s)
Appearance Mr. K. S. Chandrasekar, JDR for the Revenue.
Mr. K.S. Ramesh, Consultant for the respondent.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) FINAL ORDER No._______________________2011 Per M.V.Ravindran This is an appeal filed by the Revenue against the Order-in-Appeal No.53/2008(H-II)[D]Cus dt. 31/10/2008.
2. The ld. DR for the Department would submit that the respondents herein had imported goods and filed Bill of Entry. At the time of filing the B/E, they did not have any valid Importer-Exporter Code (IEC) Number allotted by DGFT as per the provisions of Section 7 of the Foreign Trade (Development and Regulation) Act, 1992. It is the submission that once the goods are imported without IEC Number, they fall under the category of prohibited goods. It is the submission that these goods are liable for confiscation under Section 111 sub-clause (d) of the Customs Act, 1962 and once the goods are liable for confiscation, penalty is imposable under the provisions of section 112 of the Customs Act, 1962. It is the submission that the adjudicating authority has imposed penalty under Section 117 of the Customs Act, 1962. He would submit that the question of imposition of penalty under Section 117 of the Customs Act, 1962 would not arise, as it is evident that the appellant had not followed the provisions of Customs Act, 1962. He would submit that aggrieved by such an order of the adjudicating authority, an appeal was preferred before the learned Commissioner (Appeals) and the learned Commissioner (Appeals) has come to the conclusion that the provisions of Section 111 cannot be attracted to the cases in hand. Coming to such a conclusion, the Commissioner (Appeals) has rejected the department's appeal. He would submit that the grounds of appeal raised by them would be read.
3. On perusal of the grounds of appeal, it is seen that the basic thrust of the Revenue's appeals is that the respondents herein had violated the provisions of Section 7 of Foreign Trade (Development & Regulation) Act, 1992 read with Foreign Trade Policy, which would indicate that no export or import shall be made by any person without an Importer-Exporter Code (IEC) number unless specifically exempted. It is the submission that for an assessee to import or export any goods, irrespective of their description, if imported or exported without possessing an IEC, would render the said goods as prohibited, which would render the goods liable for confiscation as per the provisions of Section 111(d) of the Customs Act, 1962 and provisions of Section 112 and provisions of Section 125 of the Customs Act are attracted. They would rely upon the judgment of Nazir-ur-Rahman Vs. CC, Mumbai [2002 (174) ELT 493(Tri.-Mumbai)] and the judgment of the Hon'ble Supreme Court in the case of Shri Om Prakash Bhatia Vs. CC, Delhi [2003 (155) ELT 423(SC)] wherein it was held that prohibition of importation or exportation of goods could be subject to certain prescribed conditions, to be fulfilled before or after clearance of such goods and if such conditions are not fulfilled, it may amount to prohibited goods as per provisions of Section 2(33), 11 and 113(d) of the Customs Act, 1962. In short, the entire argument of the Revenue is that the goods, which were imported without IEC Code, are liable for confiscation under Section 111(d) of the Customs Act and consequences thereon should have been considered by the lower authorities.
4. I have perused the Order-in-Original and Order-in-Appeal. The relevant findings in OIO passed by the adjudicating authority reads as under:-
"At the time of filing the Bill of Entry, they did not have valid Importer-Exporter Code number allotted by DGFT as provided under section 7 of the Foreign Trade (Development and Regulations) Act, 1992. They were asked to explain the reasons for non-availability of IEC for which they have not given any satisfactory explanation and requested for filing manual Bill of Entry.
The importer is not in possession of IEC as provided under Section 7 of the Foreign Trade (Development & Regulation) Act, 1992. Therefore, they are liable for penalty under Section 117 of Customs Act, 1962 read with Section 11 of the Customs Act, 1962."
5.1. Against such an order, the Revenue's appeal was disposed off by the learned Commissioner (Appeals) by recording the following findings:-
"I have gone through the case records. The impugned order is totally bereft of the details of the goods imported. In the absence of such details, it is next to impossible to say whether contravention of Sec. 111(d) can be alleged as sought for by the reviewing authority. In this context, it may be pertinent to reproduce the definition of 'prohibited goods' as per Section 2(33) of the Customs Act, which reads as follows:
33) "prohibited goods" means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with;
It is clear from the above definition that importation without IEC ipso facto does not make the goods prohibited. Something more is required before taking a view that the provisions of Sec. 111 are attracted in such cases. As both the impugned order and the grounds of appeal of the appellants do not say anything about this aspect, it is clear that the importation is not in contravention of any other conditions imposed in respect of such goods or the provisions of the Customs Act or any other law for the time being in force. The respondent did not produce a valid IEC code number before the Customs authorities, for which the adjudicating authority has rightly imposed penalty under Sec. 117 of the Customs Act, 1962."
5.2. It can be seen from the above reproduced portion of the ld. Commissioner (Appeals)'s order that he was right in coming to a conclusion that he is not in a position to come to a decision as to how the goods are liable for confiscation under Section 111(d) of the Customs Act, 1962. On a specific query from the Bench, the learned DR fairly submitted that no show-cause notices were issued to the respondents in these cases, as provided in Section 124, for either confiscation of the goods or for the purpose of imposition of penalty. On a plain reading of the provisions of Section 124 of the Customs Act, 1962, it is very clear that proposal for confiscation and/or imposition of penalty needs to be preceded by issuance of show-cause notice. If it is the case of the Revenue that the goods imported by the respondents herein were prohibited goods due to non-availability of IEC number and would in turn be liable for confiscation under Section 111(d) of the Customs Act, 1962, Revenue should have issued a show-cause notice under Section 124 of the Customs Act, 1962 proposing to confiscate the goods and for consequent actions like redemption fine and/or for imposition of penalty. In the absence of any such proposition, the learned Commissioner (Appeals) was correct in coming to the conclusion that there is no contravention of Section 111(d) of the Customs Act, 1962 (that also in an appeal preferred before him). The impugned orders are correct and legal, do not call for any interference from the Tribunal. Hence, the impugned orders passed by the ld. Commissioner (Appeals) are upheld. The appeal filed by the Revenue is rejected.
(Pronounced and dictated in open court) (M.V.RAVINDRAN) MEMBER (JUDICIAL) Nr 6