Custom, Excise & Service Tax Tribunal
M/S International Seaport Dredging Ltd vs Cc & St, Visakhapatnam-Cus on 2 September, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Division Bench Court I Appeal No. C/667/2008 (Arising out of Order-in-Original No.05/2008 dt. 02.07.2008 passed by CC, Visakhapatnam ) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Honble Sh. Madhu Mohan Damodhar, Member(Technical) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s International Seaport Dredging Ltd., ..Appellant(s) Vs. CC & ST, Visakhapatnam-Cus ..Respondent(s)
Appearance Sh. V.S. Manoj, Advocate for the Appellant.
Sh. S. Chandra Bose, Authorised Representative for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Honble Sh. Madhu Mohan Damodhar, Member(Technical) Date of Hearing: 02.09.2016 Date of Decision: 02.09.2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] Brief facts:
The Appellant had imported a consignment containing 6 Dumper Caterpillar 730 covered under Bill of Entry No.333456 dated 27.05.2008, claiming the goods to fall under the Customs tariff Heading 87041090 as motor vehicles for the transport of goods other dumpers designed for off-highway use. The question that arose is whether the said dumpers imported by Appellant will have to conform to the conditions set out in the Import Licensing Notes to Chapter 87 prescribed under Import-Export policy 2004-2009 for new motor vehicles. The commissioner of Customs vide his Order in Original No. 05/2008 dated 02.07.2008 decided the matter on merits and concluded as under:
a) Dumpers under Customs Tariff Heading 87041090 is a vehicle as defined by Section 2(28) of the Motor Vehicles Act, and thus the Appellant is required to fulfil the conditions set out in Motor Vehicles Rules, 1989 and the conditions as prescribed in Para 2 II of the Licensing Notes to Chapter 87.
b) The Importers did not submit any evidence to claim that the dumpers had fulfilled all the above-mentioned conditions.
c) Further Visakhapatnam port is not included in the list of notified ports for the import of new vehicles.
d) The goods are liable to be confiscated under Section 11(d) of the Customs Act, 1962 as the imp[ort is contrary to the prohibition imposed by law in force, and thus liable to penalties under Section 112(a) of the customs Act, 1962.
e) The Order was passed levying Customs Duty of Rs.4,22,35,949/-, which was paid and the order proposed to confiscate the goods in question valued at Rs.9,60,08,733/- and an option to pay fine of Rs.96,00,000/- to redeem the goods under Section 125 of the customs Act, 1962 was given and penalty of Rs.48,00,000/- was imposed under Section 112(a) of the customs Act, 1962.
Aggrieved, appellant has filed this appeal.
2. On behalf of appellant, the Ld. Counsel Shri. V.S. Manoj submitted that duty demand of Rs. 4,22,35,949/- has already been paid by appellant vide TR-6 Challan dated 28.05.2008. He however argued that the goods were confiscated under Section 111(d) of the Customs Act, 1962 which is not legal or proper as the goods (Dumpers) are not prohibited goods. There is no violation of 111(d) warranting confiscation and imposition of penalty under Section 112 of the Act. Goods were properly imported and therefore will not attract the said provisions. That the goods have been re-exported also.
3. On behalf of Department the Ld AR Shri. S.C. Bose submitted with regard to invocation of Sections 111 (d) and 112 (a) of Customs Act, 1962 that Visakhapatnam port is not included in the list of notified port through which new motor vehicles are permitted for import, hence the vehicles attain the colour of goods which are contrary to prohibition imposed, hence 111(d) and 112(a) are applicable.
4. Heard both sides and gone through the records.
5. For better appreciation of the issue under analysis the relevant provision of Sections 111(d), 112 (a) and 125 of Customs Act,1962 are reproduced as under:
Section 111(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. Section 112 (a): Who in relation to any goods does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111 abates the doing or omission of such an act, or
125. Option to pay fine in lieu of confiscation -
(1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods 1[or, where such owner is not known, the person from whose possession or custody such goods have been seized,] an option to pay in lieu of confiscation such fine as the said officer thinks fit:
Provided that, without prejudice to the provisions of the proviso to sub-section (2) of section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon. [(2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1) the owner of such goods or the person referred to in sub-section (1) shall, in addition, be liable to any duty and charges payable in respect of such goods.]
6. In the instant case there is no prohibition in force against import of the vehicles. There is only restriction in Import Licensing Notes of Chapter 87 of import export policy 2004-2009, that importation of new vehicles shall be permitted only through specified Customs Port at Nhava Sheva, Kolkatta, Chennai, ICD-Tuglakhabad, Delhi Air Cargo and Mumbai Port. Other conditions of import are also specified in the said Licensing notes. However, there is no prohibition on their importation. By any stretch of imagination, the word restriction cannot be equated or read as prohibition. This being so, invocation of 111(d) is not in order. Possibly one or more of the situations attracting confiscation as listed out in 111(a) to (p) may well have been applicable to the facts of this case, but definitely not 111(d). In the event the goods are not liable for confiscation under 111(d) and by implication the invocation of 112(a) and Section 125 are also not sustainable. We therefore have no hesitation in setting aside the impugned order to the extent of confiscation of the goods under Section 111(d), imposition of redemption fine under Section 125 and imposition of penalty under Section 112 (a) of the Act (ibid).
7. The appeal is allowed in above terms.
(Operative part of this order was pronounced in court
on conclusion of the hearing)
(MADHU MOHAN DAMODHAR) (SULEKHA BEEVI C.S.)
MEMBER(TECHNICAL) MEMBER(JUDICIAL)
Jaya.
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