Custom, Excise & Service Tax Tribunal
Kingston Properties Pvt. Ltd vs Nhava Sheva on 8 February, 2018
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI APPEAL NO: C/320/2009 [Arising out of Order-in-Original No: 122/08-09 dated 16/01/2009 passed by the Commissioner of Customs (EP), Nhava Sheva.] Kingston Properties Pvt. Ltd. Appellant versus Commissioner of Customs (EP) Nhava Sheva Respondent
Appearance:
Shri Vinod Awtani, Chartered Accountant for the appellant Shri Ahibaran, Additional Commissioner (AR) for the respondent CORAM:
Honble Shri Ramesh Nair, Member (Judicial) Honble Shri C J Mathew, Member (Technical) Date of hearing: 08/02/2018 Date of decision: 28/02/2018 ORDER NO: ____________________________ Per: Ramesh Nair The fact of the case is that the appellant filed bill of entry for the clearance of Royal Barge marble slabs valued at US $ 38.470 per sq. meter with total assessable value of ` 47,45,239/- under EPCG scheme. The appellant produced EPCG licence issued by DGFT for effecting clearance of the said consignment under EPCG scheme vide Customs Notification No. 64/2008 at concessional rate of 3% basic customs duty. As specified in EPCG licence the said licence is not valid for import of items relating to negative list/restricted list and the value of the imported marble slab should not be less than US $ 50 PSM. In terms of Notification No. 18(RE-2009) dated 30/06/2008 issued by DGFT import of polished marble slabs is restricted and should be permitted freely only if the CIF value is US$ 50 PSM and above. Since the CIF value of the marble slabs under import was US $ 38.470 PSM, which is less than US$ 50 PSM the said import is not allowed and the goods are liable for confiscation under Section 111(d) of the Customs Act, 1962 read with para 5.1 of the Foreign Trade Policy 2004-09. The adjudicating authority confiscated the goods and imposed a redemption fine of ? 13 lakhs and imposed a penalty of ? 4 lakhs. The value of the goods was re-determined at US $ 50 PSM CIF against US $ 38.470 PSM CIF. Being aggrieved by the order-in-original appellant filed the present appeal.
2. Shri Vinod Awtani, Learned Chartered Accountant appearing on behalf of the appellant submits that they placed an order for import of marble slab US $ 35 PSM in the month of August 2008. However, import of polished marble took place in December 2008. In the meantime, appellant obtained the EPCG licence wherein import of marble was allowed subject to condition that the CIF value of imported marble should not be less than US $ 50 PSM. The appellant vide their letter dated 11/12/2008 agreed to pay duty assessed at CIF value of US $ 50 PSM for the marble slabs imported as per the Policy. He submits that the appellant did not have any mala fide intention and violations of the conditions specified in the Notification. Any violation of the conditions specified in the Notification was due to bonafide belief that marble was of OGL item. He submits that as per ITC (HS) classification of marble under import is classified under Chapter Heading 6802 9910 and shall be free provided that CIF value of import is US$ 50 PSM or above of marble imported. He submits that the department has assessed the CIF value as US $ 50. Therefore, the condition in Notification No. 18(RE-2008) and stipulated under licence stands fulfilled. Therefore, the adoption of value of US $ 50 PSM makes goods restriction free. Therefore, no confiscation of goods and penalty was warranted. He alternatively submits that the appellants are actual user importer, therefore, a lenient view may be taken. He placed reliance on the following judgments.
i. Rational Art & Press Pvt Ltd v. Commissioner of Customs (Imports), Mumbai 2007 (215) ELT 0522 (Tri-Bom.) ii. KH Arind v. Commissioner of Customs, Chennai 2006 (205) 674 (Tri.-Chennai) iii. Photphone v. Collector of Customs 1994 (73) ELT 157
3. As regards the penalty he placed reliance on the following judgments.
i. ND Metal Industries Ltd v. Commissioner of Customs (Import), Nhava Sheva 2007 (220) ELT 807 (Tri.-Mum.) ii. Safari Food Pvt Ltd. v. Commissioner of Customs (Import), Nhava Sheva 2007 (215) ELT 271 (Tri.-Mum.) iii. S P Sacheva v. Commissioner of Customs, New Delhi 2002 (149) ELT 412 (Tri.-Del.)
4. Shri Ahibaran, Learned Additional Commissioner (AR) appearing on behalf of the respondent submits that as per the condition of notification, marble is permitted to be imported only when the price of marble is US $ 50 PSM or above. The appellant have imported the goods for which the value of the goods is US $ 38.470 PSM. Thus they have violated the provisions of Foreign Trade Policy for import of marble. Therefore, the goods was rightly liable to confiscation. He placed reliance on the judgment of this Tribunal in the case of Shri Krishna Impex v. Commissioner of Customs, New Delhi 2014 (300) ELT 98 (Tri. Delhi).
5. We have carefully considered the submissions made by both the sides. We find that there is no dispute that the appellant have contravened the provisions of Foreign Trade Policy by which goods valued below US $ 50 falls under the restricted category for which the licence is required for import. Though the appellant have imported goods valued at US $ 38.470 PSM CIF but did not obtain the licence. Accordingly, the goods imported is restricted. Therefore, the goods were rightly held liable for confiscation.
6. Considering the fact that the appellant is the actual user and there is no malafide intention in not obtaining the licence the appellant deserve leniency. Therefore, taking into consideration the overall facts and circumstances, we are of the view that the redemption fine and penalty in the impugned order is at higher side which needs to be reduced. We reduce the redemption fine from ? 13 lakhs to 5 lakhs and the penalty is reduced from ? 4 lakhs to 1 lakh.
7. The appeal is partly allowed in the above terms.
(Pronounced in Court on 28/02/2018) (C J Mathew) Member (Technical) (Ramesh Nair) Member (Judicial) */as09022022702 5