Custom, Excise & Service Tax Tribunal
S F Trading Company vs Commissioner Of Customs-Nhava Sheva - V on 17 February, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
REGIONAL BENCH - COURT NO. I
CUSTOMS APPEAL No. 87611 of 2023
(Arising out of Order-in-Appeal No. 446(Gr.VI)/2022(JNCH)/Appeals dated 19.05.2022
passed by the Commissioner of Customs (Appeals), Mumbai Customs Zone-III, Mumbai)
S.F. Trading Company .... Appellants
th
No.1001, Valencia Park,10 Floor,
B.J.Marg, Byculla (West)
Mumbai - 400011.
VERSUS
Commissioner of Customs .... Respondent
Nhava Sheva-V Commissionerate
Jawaharlal Nehru Customs House (JNCH)
Nhava Sheva, Taluk Uran
Raigad District - 400 707.
APPEARANCE:
Shri Anil Balani, Advocate for the Appellants
Shri Rajiv Ranjan, Authorized Representative for the Respondent
CORAM: HON'BLE MR. M.M. PARTHIBAN, MEMBER (TECHNICAL)
FINAL ORDER NO. A/85192/2025
Date of Hearing: 17.10.2024
Date of Decision: 17.02.2025
PER: M.M. PARTHIBAN
This appeal has been filed by S. F. Trading Company, Mumbai (herein
after, for short, referred together as 'the appellants') assailing the Order-in-
Appeal No. 446(Gr.VI)/2022(JNCH)/Appeals dated 19.05.2022 (referred to,
as 'the impugned order') passed by the Commissioner of Customs
(Appeals), Mumbai Customs Zone-III, Mumbai.
2.1 Brief facts of the case, leading to this appeal, are summarized herein
below:
2.2 The appellant herein, inter alia, had imported a consignment of
miscellaneous items from abroad and filed Bill of Entry (B/E) No. 6092892
dated 01.11.2021 with the jurisdictional Customs authorities. One of the
items under import is "Metal Cigarette Lighter" classifiable under Customs
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Tariff Item (CTI) 9613 2000 of the Customs Tariff Act, 1975. The said
import consignment was subjected to 100% examination and it was found
that the imported goods contain 260 cartons of "Gun shape Metal Cigarette
Lighters". The Customs Examining Officer of the Navkar Corporation Ltd.,
Container Freight Station(CFS) had come to a conclusion that such goods
are covered under the definition of replica of arms as defined in 'Section 6A
of the Weapons Act, 1990'(as mentioned in the Seizure Memo, instead of
"Arms Act, 1959") thus requiring license from appropriate authority. In the
absence of any valid license covering such imported goods, the department
had seized the imported goods under a Seizure Memo dated 27.11.2021.
The customs examination officers had drawn samples of gun shaped metal
Sealed cigarette lighters and forwarded the same to the assessment group
for further action.
2.3 It was observed by the customs assessment group officers that the
gun-shaped metal cigarette lighters appear to be suspicious on its primary
function of being used as a lighter, since it was found that the brand name
of manufacturers of guns/pistols were mentioned on such lighters and the
declared value of the goods was low at merely Rs.5.30/- per piece. Further
it was found that in terms of Notification S.O. No.2461(E) dated
18.07.2016 issued by the Ministry of Home Affairs, Government of India,
"Firearms Replica" have been excluded from all Sections of Arms Act, 1959
except Section 5 ibid and therefore the Customs Assessment Group found
that the import of impugned goods was without a Valid License from the
Government authorities and in the absence of the same the imported
goods are liable for confiscation and penal consequences under the
Customs Act, 1962. The matter was taken up in adjudication and the
Deputy Commissioner of Customs, Group-VI, Nhava Sheva Customs
Commissionerate-V, JNCH, Nhava Sheva had ordered for absolute
confiscation of the imported "Gun shape Metal Cigarette Lighters" under
Section 111(d) of the Customs Act, 1962 and for its destruction at the
expense of the importer. Besides, on the remaining items of import which
are not in conformity with the Notification No. 44 (RE-2000) dated
24.11.2000for labelling of mandatory details, the goods were also ordered
for confiscation with the option for redemption upon payment of a fine of
Rs.10,000/- under Section 111(m) ibid and imposed penalty of Rs.5000/-
on the importer under Section 112 (a) ibid.
2.4 Being aggrieved with the above order, the appellants had filed an
appeal before the Commissioner (Appeals). In the Order-in-Appeal dated
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19.05.2022, which is impugned herein, learned Commissioner (Appeals)
had dismissed the appeal on the ground that the appellants had indulged in
improper importation of "Replica of gun" which is restricted in nature and
the same is in violation of the DGFT's import policy and consequently held
that the same are liable for confiscation and penalty. Thus, he upheld the
order of the original authority and rejected the appeal filed by the
appellants. Feeling aggrieved with the said impugned order, the appellants
have filed this appeal before the Tribunal.
3.1 Learned Advocate appearing for the appellants, firstly submitted that
the Department had seized the imported goods on the ground that these
are covered under the 'replica of arms' as defined under Section 6A of the
Weapons Act, 1990 and therefore were held liable for seizure under Seizure
Memo dated 27.11.2021. In this regard, he submitted that there is no
such Weapons Act, 1990 existent in law in our country. Therefore, the
seizure memo dated 27.11.2021 itself is illegal and the same is void ab
initio.
3.2 He further submitted a copy of the Order-in-Original dated
26.07.2024 passed by the Additional Commissioner of Customs in charge
of the same Customs Assessment Group VI of the JNCH Customs
Commissionerate-V, wherein similar goods of description 'Pistol shape
lighters' bearing the brand name of original gun/pistol manufacturer have
been cleared by enhancing the assessable value of such goods and no
objection with respect to licensing of such imported goods were raised in
such imports. Therefore, he submitted that import of gun shaped cigarette
lighters in their case is permissible in law and therefore the impugned
order confirming the confiscation and imposition of penalty under the
mistaken impression of it being covered under Section 6A of the Weapons
Act, 1990, is liable to be set aside. He further submitted that the
Department had no documents or placed any evidence to claim that the
imported goods are comparable with the actual guns to claim that it is a
replica. Further, he also stated that there is no import restrictions under
Section 5 of the Arms Act, 1959 nor there is any corresponding restrictions
in the ITC-HS policy for import of gun shaped lighters, as evidenced in the
recently released JNCH imports which are also of similar nature with the
subject goods of import and having weight of 400 to 500 grams. In view of
the above, learned Advocate claimed that the impugned order is liable to
be set aside.
4. Learned Authorized Representative (AR) appearing for Revenue,
reiterated the findings made by the Commissioner (Appeals) in the
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impugned order. He further submitted that in view of the specific findings
for upholding the confiscation and imposition of penalty ordered by the
original authority, as recorded by the Commissioner (Appeals), it is not
permissible to entertain the appeal filed by the appellants. Accordingly, he
submitted that the impugned order is sustainable in law.
5. Heard both sides and perused the case records. The additional
submissions made in the form written paper books in this case was also
perused carefully.
6. The short issue for determination before the Tribunal is whether the
confiscation of imported goods in the present case, on the ground that
these are 'replica of weapon' and its import is restricted/prohibited; and
imposition of penalty on the appellants is legally sustainable or not?
7. In order to appreciate the issues under dispute, the specific legal
provisions of the Customs Act, 1962read with relevant legislations
governing import of fire arms, its replica and ITC-HS of EXIM policy are
extracted and herein given below for ease of reference:
Customs Act, 1962
Confiscation of improperly imported goods, etc.
"Section 111. The following goods brought from a place outside India shall
be liable to confiscation: --
....
(d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force;
...
(m) any goods which do not correspond in respect of value or in any other particular with the entry made under this Act or in the case of baggage with the declaration made under section 77 in respect thereof, or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to sub-section (1) of section 54;....."
Plain reading of the above legal provisions clearly indicate that imported goods are liable for confiscation under Section 111 (d) of the Customs Act, 1962, only if 'import' of such goods is prohibited under the relevant legislation is in force. Similarly, if the imported goods do not correspond in respect of value or other particulars declared therein, then such goods are liable for confiscation under Section 111 (m) ibid. For deciding whether such provisions of Section 111(d) ibid is applicable or not, firstly, we may examine the imported goods, with respect to declared classification under CTI 9613 2000 and then as per the department's claim under Chapter 93 covering Arms and Ammunition.
5C/87611/2023 8.1 In order to examine, whether the imported items in the impugned case are prohibited or not, we may refer to the relevant legislative provisions containing restrictions on import or export of goods as are specified in the ITC-HS itemwise import policy of Foreign Trade Policy in force at the time of import, issued under the Foreign Trade (Development and Regulation) Act, 1992. The extract of the relevant item is ITC-HS for the impugned goods along with the amendments introduced w.e.f. 29.06.2023 are given below:
6C/87611/2023 7 C/87611/2023 The ITC-HS relevant for the cigarette/pocket lighters as provided under CTI 96132000, prescribe that the imports are allowed 'free' subject to the condition that the CIF value of imported lighters shall be at Rs.20 or above per lighter. In other words, where the import of lighters is having CIF value less than Rs.20 per lighter, then it is prohibited. This restriction in respect of lighters were prescribed vide Notification No.15/2023 dated 29.06.2023.8
C/87611/2023 Since, the goods have been imported vide B/E No.01.11.2021, prior to the amendment to the import policy under Notification dated 29.06.2023, and that it has expressly provided that the import policy has been revised from "Free" to "Prohibited" as per restrictions w.r.t. value per lighter as discussed above, I am of the clear view that the imported goods herein classifiable under CTI 9613 1000 and CTI 9613 2000 are freely importable. Therefore, it could be concluded that as there are no restrictions for import of the impugned goods, there is no case for application of Section 111(d) ibid in the present case.
8.2 It is a fact on record that in respect of the Seizure Memo dated 27.11.2021issued by the Customs Examining Officer, CFS Navkar Corporation Ltd., it is specifically mentioned that the imported goods covered under B/E No. 6092892 dated 01.11.2021 were found to be of Gun Shape during examination fall under definition of replica of arms as defined in Section 6A of Weapons Act, 1990 thus requiring License from appropriate authority.....The snapshot of the Seizure Memo is extracted and given below:
9C/87611/2023 8.3 Further, both the authorities below, have referred to the definition of replica of Gun; the original authority had mentioned it in paragraph 14 of the order dated 08.12.2021 and the learned Commissioner (Appeals) had extracted in verbatim the definition given in Section 6A of the Weapons Act, 1990, in paragraph 7.2 of the impugned order and referred to it in paragraph 10 of the impugned order dated 19.05.2022 to come to an conclusion that the impugned goods are liable for confiscation under Section 111(m) of the Customs Act, 1962. It is further mentioned in such orders by those authorities that Firearm replicas, though are exempt from the provisions of the Arms Act, 1959, in terms of Section 41 of the said Act, are required to follow the provisions of Section 5 ibid dealing with licensing provisions.
8.4 In order to appreciate the above stand taken by the authorities below, in contrast to the plea made by the learned Advocate that there exists no such legal provision of definition of 'replica of weapon' in the Indian legislation, I made extensive search of the records placed in file. I do not find any document or extract in the records, orders of the lower authority giving the authoritative definition of 'replica of weapon' as recorded in the original order. I further made search in the official digital repository of the Government of India as given in the 'India Code'- a digital repository of laws maintained by the Legislative Department of the Ministry of Law & Justice. I did not find any reference to the 'Weapons Act, 1990' therein. However, in search of such definition in the open website, I had stumbled upon a definition of what is replica of a weapon given under Section 6A of the Weapons Act, 1990 of the Queensland, a State in North Eastern Australia. Though, I would not like to deal with such provisions as these do not relate to the legislations governing import into India, to the extent that these have been quoted by the authorities below right from the stage of seizure of the imported goods on 27.11.2021 vide Seizure Memo, through the Customs assessment, departmental adjudication process by the learned Deputy Commissioner of Customs, JNCH, Nhava Sheva and till the first appellate stage vide the impugned order, it is felt necessary at least to highlight such reckless manner in which the legal provisions are viewed for coming to an conclusion about the liability for confiscation of goods by the authorities below.
8.5 The relevant extract of the said Section 6A of the Weapons Act, 1990 of the Queensland, which inadvertently came to my notice, is captured as snapshot and given below:10
C/87611/2023 11 C/87611/2023 8.6 In view of the non-applicability of the definition given for 'replica of weapon' in some other Act of a foreign country and such definition not available in the Arms Act, 1959, I am unable to accept the stand taken by the authorities below, in concluding that the imported goods viz., "Gun shape Metal Cigarette Lighters" are liable for confiscation under Section 111(d) /111(m) of the Customs Act, 1962.
8.7 Further, I had also perused the Arms Rules, 1959, as amended which provide for the definition of 'firearm replica' under Rule 2(26) ibid. The extract of the same is given below:
"Rule 1:
(1) These rules may be called the Arms Rules, 2016. (2) They shall come into force on the date of their publication in the Official Gazette.
Rule 2: Definitions.─ (I) In these rules, unless the context otherwise requires, ─ ....
(26) "firearm replica" means an object designed to resemble a firearm which has an appearance that is so realistic as to make it indistinguishable, for all practical purposes, from a real firearm and which has been rendered innocuous;..."
I also find that detailed provisions have been prescribed under the said Rules of 1959 for manufacture of replica of firearms, its licensing, inspection by authorities, maintenance of records in the licensed facility, sale or export etc., which are not applicable to the 'cigarette lighters' of gun shape, as these remain as lighters by its functioning and not as replica of firearms. In fact, the original authority in paragraph 4 of the order dated 8.12.2021 has mentioned that the impugned goods work as lighter on pressing the trigger. Therefore, I am of the considered view that the impugned order confirming the original order in confiscation of imported goods and in imposition of penalty on appellants is liable to be set aside.
9. In view of the above detailed discussions, I do not find any merits in impugned order dated 19.05.2022. Therefore, by setting aside the impugned order, I allow the appeal filed by the appellants in their favour.
(Order pronounced in open court on 17.02.2025) (M.M. Parthiban) Member (Technical) Sinha