Customs, Excise and Gold Tribunal - Bangalore
Hetero Drugs Limited And Ors. vs The Commissioner Of Customs on 23 August, 2006
Equivalent citations: 2006(113)ECC279, 2006ECR279(TRI.-BANGALORE)
ORDER T.K. Jayaraman, Member (T)
1. Since all these appeals involve common question of law and facts, I take them up together for disposal.
Appeal Nos.
OIO/Date Value of goods Redemption Fine Penalty C/300/2004 No. 12/2004 dt. 23.4.2004 Rs. 26,71,008/-
1,33,550/-
Rs. 66,775/-
C/305/2004 No. 10.2004 dt. 23.4.2004 Rs. 28,43,784/-
Rs. 1,42,189/-
Rs. 71,095/-
C/306/2004 No. 9/2004 dt. 23.4.2004 Rs. 54,16,731/-
Rs. 2,70,837/-
Rs. 1,35,418 C/308/2004 No. 13/2004 dt. 23.4.2004 Rs. 27,81,813/-
Rs. 1,39,091/-
Rs. 69,545/-
C/316/2004 No. 11/2004 dt.23.4.2004 Rs. 1,47,37,870/-
Rs. 7,36,894/-
Rs. 3,68,447/-
2. The appellants imported 'ISO PROPYL ALOCHOL'. They filed Into bond bill of entry. Para 1b of the General Notes on Import Policy as specified in ITC (HS) classification of Export & Import Items, 2002-2007 specifically mentions that "besides other conditions mentioned in the manufacture, storage and Import of Hazardous Chemical Rules, 1989 the importer shall before 30 days but not latter than the date of import, furnish the details specified in the Rule 18 to the authority specified in the Schedule 5 of the said Rules." The above inclusion was done vide DGFT Notification 35/2003 dated 16.2.2004. Thus, there is a requirement of furnishing the details before 30 days from the date of import. ISO PROPYL ALCOHOL is included as one of the hazardous chemicals, for which the above intimation is to be given to the following authorities.
(a) Chief Controller Imports & Exports under Import & Export (Control) Act, 1947.
(b) Central Pollution Control Board or State Pollution Control Board under Environment (Protection) Act, 1986.
It was found that the appellants had not compiled with the above provisions. Hence, Revenue proceeded against them proposing confiscation of the impugned goods under Section 111(d) of the Custom Act 1962 read with Rule 3(2) and 3(3) of the Foreign Trade (Development & Regulation) Act, 1992 for non-observance of the conditions of the EXIM Policy and provisions of the Manufacture, Storage and Import of Hazardous Chemicals Rules 1989. The Commissioner after detail examination of the legal positions held that the goods are liable for confiscation. However, he imposed redemption fine as indicated in the above tabular column. Further he imposed penalties under Section 112(a)(i) of the Customs Act 1962. All the appellants are aggrieved over the impugned Orders-in-Original. Hence, they have come before this Tribunal for relief.
3. Shri K. Parameswaran, learned advocate appeared for the appellants and Shri K.S. Reddy, learned JDR for the Revenue.
(i) The learned advocate pointed out that the appellants were not aware of giving advance intimation but have complied with the requirements stipulated in the Hazardous Chemicals Rules and hence, the same can be considered only as a procedural violation for which confiscation or imposition of penalty would not be warranted.
(ii) Merely not following the requirement of giving intimation as provided in Para 1b cannot make the goods prohibited. Hence, confiscation and imposition of penalty cannot be sustained.
(iii) There is only a requirement of importation in accordance with the provisions of the Hazardous Chemicals Rules and in fact Rule 18 of the said Rules even permit giving intimation subsequently within 30 days and this condition have obviously been fulfilled.
(iv) The bill of entry filed was for only bonding and not for clearance or movement of the goods.
(v) There is no allegations that the requirements of the said Rules have not been followed and merely because no intimation had been given before 30 days and not latter than the date of import, they would not become prohibited goods.
(vi) There was a past practice of not giving any such advance intimation and this was not the first consignment imported. Therefore, the question of imposing penalty would not arise at all, particularly under Section 112 of the Customs Act.
(vii) The learned advocate relied on the following case laws a. Silkon Silk Mills (Exports) Ltd. v. CC .
b. CC v. M. Vasi .
c. CC v. Shipping & Trading Associates (P) Ltd. .
d. Breach Candy Hospital & Research Centre v. CCE .
e. Vidya Mahadik v. CC .
f. M. M. Exports v. CC .
g. Aquamall Water Solutions Ltd. v. CCE .
h. EID Parry (I) Ltd. v. CCT .
4. The learned JDR pointed out that even though the Notification 35/2003 containing the stipulation was effective only from 16.2.2004 for informing the concerned authorities 30 days before the import in case of hazardous import, even before that there was this provision in Appendix-I of the EXIM Policy. In other words, he pointed out that this provision is not new. It was there already but in view of the increased importance for prevention of pollution and protection of environment, the DGFT Notification was issued by including this provision in the General Notes of Import Policy itself by deleting the Appendix - I. Further, he pointed out that inasmuch as the stipulation was not complied with, the goods become prohibited and they are liable for confiscation. The importers are also liable for penalty. In this connection he relied on the following two case laws.
(I) Om Prakash Bhatia v. CC, Delhi .
(II) Nine Star Exports v. CC (Ports), Chennai Further, he stated that in many cases when the stipulation was ignored by the importers, Revenue took action for confiscation and imposition of penalty. In most of these cases, the importers paid the fine and penalty without demur and only in few cases, they are coming for appeal.
5. I have gone through the records of the case carefully. The fact that the stipulation of prior information as per Para 1b of the General Notes on Imports Policy 2004 has not been followed, is not in dispute. The learned advocate vehemently argued that this lapse cannot make the goods prohibited and therefore, the goods cannot be held to be confiscable. In the case laws relied on by the learned Counsel, it was held that procedural lapses cannot render the goods prohibited. The learned advocate tried to make a fine distinction between certain goods which cannot be imported at all and those which can be imported subject to fulfillment of certain procedural conditions. The present case comes under the latter category. However, the learned Departmental Representative relied on the Apex Court's decision rendered in the case of Om Prakash Batia v. CC cited supra wherein it is held that when importation or exportation is subjected to certain prescribed conditions to be fulfilled before or after the clearance of goods and if the conditions are not fulfilled that would render the impugned goods prohibited. He also invited my attention to a definition of prohibited goods under Section 2(33) of the Customs Act, which is reproduced below.
"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
6. In view of the interpretation of the expression "prohibited goods" by the Supreme Court, I have to hold that the impugned goods in the present appeals are prohibited, therefore, the Adjudicating Authority is right in holding that they are liable for confiscation. Considering the value of the goods, the fines imposed in line of confiscation are not heavy. They are upheld. As regards penalty, I set aside the same in view of the technical nature of offence and absence of mala fide. Thus, the appeals are disposed of in the above terms.
(Pronounced in open Court on 23 AUG 2006)