Custom, Excise & Service Tax Tribunal
M/S. Espn Software India Pvt. Ltd vs Cc (I&G) on 2 May, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI.
Date of hearing:04.03.2013
Date of Decision:02.05.2013
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Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982.
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Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
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Whether Their Lordships wish to see the fair copy of the Order?
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Whether Order is to be circulated to the Departmental authorities?
Customs Appeal No. 227/2012
(Arising out of Order-in-Original No.01/VKG/2012 dated 9.5.2012 passed by the Commissioner of Customs (I&G), New Delhi)
M/s. ESPN Software India Pvt. Ltd. Appellants
Vs.
CC (I&G) Respondent
Customs Appeal No.193/08-CU(DB) (Arising out of Order-in-Original No.23/2007-08 dated 28/29.02.2008 passed by the Commissioner of Customs (I&G), New Delhi) CC (I&G) Appellants Vs. M/s. ESPN Software India Pvt. Ltd. Respondent Appearance: Shri Pramod Kumar, Joint CDR for the appellant.
Shri L.P. Asthana, Advocate for the respondent.
Coram : Honble Smt. Archana Wadhwa, Member (Judicial) Honble Shri Rakesh Kumar, Member (Technical) Final Order No.56263-56264/2013 dated 2.5.2013 Per Rakesh Kumar:
The facts leading to these two appeals are, in brief, as under:-
1.1 The appellant are engaged in the business of distribution of Satellite channels in India. Since for the purpose of their business, they wanted to import de-coders of model CDE 2002 -BMAC, and they were not sure as to whether the same are freely importable or required licence, they on 11.2.95 wrote to the Directorate General of Foreign Trade for clarification in this regard and the DGFT vide letter dated 22.2.96 clarified that the de-coders, in question, were freely importable. The appellant, thereafter, imported seven consignments of decoders of model CDE-2002 BMAC valued at Rs.6,46,73,363/- . Though according to the appellant, the goods were classifiable under Heading No.8529, the department classified these goods under heading 8528 and not only charged duty on that basis, but also asked for import licence, as according to the department, in the foreign trade policy during the period of dispute, the goods falling under heading no.8528, which covered reception apparatus for television, whether or not incorporating radio-broadcast or sound or video recording or reproducing apparatus; video monitors and video recording or reproducing apparatus ware the items restricted for import and required import licence. The appellant, however, paid the duty on the goods under Heading No.8528 and cleared the goods against ITC bond for cumulative amount of Rs.6,46,73,366/- backed by a bank guarantee for an amount of Rs.2.20 crores. In the meantime, the appellant on the advice of DGFT vide letter dated 02.05.97, submitted an application to the DGFT on 05.05.1997 for issue of import licence. Though the appellants application with DGFT for issue of import licence was pending, the department on 1.8.97 issued a show cause notice proposing confiscation of the goods under Section 111(d) of the Customs Act, 1962 for un-authorised import without licence and also for imposition of penalty. However, even before issue of show cause notice, the bank guarantee for the amount of Rs.2.20 Crores had been encashed by the department. The show cause notice was adjudicated by the Commissioner vide order-in-original dated 31.07.98 by which the import of the goods was held to be un-authorised and hence, the goods were held liable for confiscation and it was held that bank guarantee was rightly encashed and the encashed amount was appropriated in terms of the bond. Besides this, penalty of Rs.20 Lakh was imposed on the appellant. The appellant filed an appeal before the Tribunal which disposed of vide order-in-appeal dated 24.3.99 by which the matter was remanded to the Commissioner, since the appellants application for import licence was pending. However, the department still did not wait for the DGFTs decision on the appellants application for import licence and the Commissioner vide order-in-original dated 30.12.99 again held the import to be unauthorized and the goods imported as liable for confiscation. By this order, the Commissioner once again confirmed the previous order dated 31.07.98. In second round of appeal before the Tribunal, the Tribunal vide order-in-appeal dated 4.10.2000 again remanded the matter with directions to consider the appellants plea that in view of the Tribunals judgment in the case of C. Net Communications reported in 2004 (170) ELT 446 (Tribunal), the goods are correctly classifiable under 8529.90 and hence, no import licence would be required. The matter was adjudicated de novo once again for third time vide order-in-original dated 30.11.2007/3.12.2007 by which the Commissioner holding that the Tribunals order in case of C. Net Communications has been reversed by the Apex Court vide judgment reported in 2007 (216) ELT 337 (SC) and as per Apex Courts order, the goods, in question are classifiable as reception apparatus for television under Heading 8528 and the goods, in question, would, therefore, require an import licence. The Commissioner accordingly held once again that the import is unauthorized and accordingly, the goods are liable for confiscation. The Commissioner appropriated a sum of Rs.2.20 crores of the amount of bank guarantee which has already been encashed and imposed penalty of Rs.20 Lakh on the appellant company. However, the Commissioner in this order observed that since the goods are not available for confiscation, he is not imposing any redemption fine. Against this order, the appellant once again filed an appeal to the Tribunal. Since DGFT had issued an import licence dated 30.03.2000 specifically covering the goods imported and cleared under bills of entry whose details were also mentioned in the licence, at this stage on application of the appellant, the Tribunal admitted the licence issued by DGFT as evidence and vide order-in-appeal dated 29.2.2012 remanded the matter to the Commissioner for fresh decision in the light of the import licence having been issued by DGFT specifically covering the import in question. The matter was once again adjudicated in the fourth round of adjudication by the Commissioner vide order-in-original dated 9.5.2012. In course of proceedings before the Commissioner, the appellant specifically pleaded that in view of the specific import licence having been issued by the DGFT covering the imports, the confiscation would no longer be sustainable. However, the Commissioner vide order dated 9.5.2012 once again held the import to be unauthorized and ordered confiscation of the goods and imposed redemption fine of Rs.20 Lakhs. He also appropriated the sum of Rs.2.20 crores which was the amount recovered by the department by way of encashment of the bank guarantee. Commissioner in this order held that DGFT has no powers to issue import licence to validate as imports made in past and as such, the import licence is invalid. Against this order of the Commissioner, this appeal has been filed.
1.2. In the order dated 30.11.2007/3.12.2007, the Commissioner while appropriating the sum of Rs.2.20 crores recovered by the department by encashment of the bank guarantee, had made an observation that he is not confiscating the goods, as the same are not eligible for confiscation. Against this portion of the order, the Revenue has filed a review appeal under Section 129 D(4) read with Section 129 D(1) of the Customs Act, 1962 on the ground that this portion of the Commissioners order is incorrect in view of the Apex Courts judgement in the case of Weston Components reported in 2000 (115) ELT 270 (SC).
2. Heard both the sides.
3. Shri L.P. Asthana, Advocate,ld. Counsel for the appellant pleaded that the goods imported are specifically covered by the import licence issued by DGFT, that the import licence specifically covers the CDE 2002 BMAC decoders imported by the appellant and cleared under bills of entry no.953416 dated 17.7.96, 964339 dated 27.8.96, 964116 dated 27.8.96, 964338 dated 27.8.96, 964181 dated 27.8.96, 979353 dated 23.10.96 and 9511750 dated 13.2.97, that the Commissioner cannot challenge the validity of the import licence issued by DGFT, that Government of India has powers to issue import licence to regularize imports already made, and that in view of this the impugned order holding the goods imported as liable for confiscation and imposing penalty is not sustainable at all. He also pleaded that for the same reasons, there is no merit in the revenues appeal.
4. Shri Promod Kumar, ld. Joint CDR defended the impugned order by reiterating the findings of the Commissioner and emphasized that the DGFT has no powers to issue import licence for the goods already imports and as such, the import licence dated 13.3.2000 produced by the DGFT is invalid.
5. We have considered the submissions from both the sides and perused the records. In this case, the appellant prior to making the import of the goods, in question, had sought clarification from DGFT on the point as to whether these goods are freely importable. It is not disputed that in response to the appellants query, the DGFT vide letter dated 11.2.95 had clarified that the decoders of model CDE 2002 DMAC are covered by Sl.No.27 of the IP Circular dated 5.8.92 and are freely importable. Though in terms of para 4.13 of the relevant foreign trade policy, if any question, or doubt arises in respect of the interpretation of any provision contained in this policy or regarding classification of any item in the ITC (HS) hand book vol. 1 and Handbook (Vol.2), the said question or doubt shall be referred to the DGFT whose decision thereon shall be final and binding. However, in spite of clear provisions of Exim Policy and the opinion of the DGFT, the Customs Department still insisted on import licence and released the goods only the against the ITC bond for full value of the goods and bank guarantee for Rs.2.20 crores. We also find that even before the issue of show cause notice the bank guarantee was encashed. We fail to understand why this was done even before the matter had been adjudicated.
6. In our view, irrespective of the merits of the departments view point, once the import licence has been issued by DGFT specifically covering the goods imported by the appellant, the customs department cannot challenge the DGFTs power to issue the licence and hold the licence as invalid, as para 4.24 of the Exim Policy specifically provides that the goods already shipped or arrived in advance but not cleared from the customs, may also be cleared against import licence issued subsequently. In this case, the goods had been allowed to be cleared against ITC bond and bank guarantee and once import licence has been issued specifically covering the goods imported, the bond and bank guarantee have to be released un-conditionally. The impugned order, therefore, is contrary to the provisions of the law and is absurd. The same is, therefore, set aside. The appeal filed by the appellant is allowed with consequential relief. As regards the Revenues appeal, since the confiscation of the goods is not sustainable, there is no merit in the same and hence the same is dismissed.
[order pronounced on 2.5.2013] ( Archana Wadhwa ) Member (Judicial) ( Rakesh Kumar ) Member (Technical) Ckp.
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