Customs, Excise and Gold Tribunal - Delhi
Laser Sight (India) Pvt. Ltd. vs Commissioner Of C. Ex. on 18 July, 1998
Equivalent citations: 1999(110)ELT935(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. The issue involved in this appeal is whether the Excimer Laser imported by the Appellants is liable to confiscation and whether penalty is imposable on the importer under the Customs Act for non obtaining the Import Export Code Number.
2. Shri J.M. Sharma, ld. Consultant, submits that M/s. Laser Sight (India) Pvt. Ltd., herein appellants imported excimer laser for use in their own clinic; that the impugned goods are freely importable without a licence; that they are no regular importers and exporters; that the issue regarding the import was discussed with the State Bank of India (SBI) who opened the Letter of Credit but never advised the appellants regarding obtaining an Importer Exporter Code; that even the Customs House Agent engaged for clearance of the goods did not advise them to obtain the code. The Commissioner of Customs had confiscated the Excimer Laser under Section lll(d) of the Customs Act and ordered redemption on payment of fine Rs. 1,00,000/- and imposed a personal penalty holding that the impugned goods were imported before obtaining Code No. and thus provisions of Exim Policy 1997-2002 had been violated. The ld. Consultant submitted that the requirement of Import Export Code No. is a very procedural and technical requirement having no revenue implication; that the Code No. is issued to any person on submitting an application in DGFT's office and on payment of Rs. 1,000/-; that there are no quantitative or other restriction in issuing the Code No.; that the code is used for statistical purposes for compiling foreign trade statistics and is not covered by the definition of licence as defined in para 2(g) of Foreign Trade (Development and Regulation) Act; He also contended that the provisions of Section lll(d) of the Customs Act are not attracted in the present matter as goods were not imported in contravention of any prohibition; that at the most there was violation of Section 46 of the Act as Bill of Entry was filed without mentioning the Code Number; that only penalty can be imposed under Section 117 of the Act which prescribes the maximum penalty of Rs. 1,000/- only. He also mentioned that the settled position of the law is that redemption fine and personal penalty should commensurate with the gravity of offence and the margin of profit on illegally imported goods as held in the case of Collector of Customs v. Skefco (India) Bearing Co. reported in 1990 (49) E.L.T. 94 (T). He also mentioned that an order imposing fine without giving any details as to how quantum of fine has been arrived at is not sustainable as held in Pradeep C.H. Saha v. Addl. Collector reported in 1993 (68) E.L.T. 525 (Cal.). He further contended that they were exempted from obtaining the code as per provision of Para 4.6 of Hand Book of Procedures 1997-2002, persons importing or exporting goods for their personal use not connected with trade or manufacture or agriculture are exempted from obtaining code numbering; that the company is a legal person and the Excimer Laser was imported for personal use. He finally contended that the penalty can be imposed only for contentious conduct as held in Hindustan Steel Ltd. v. State of Orissa - 1978 (2) E.L.T. Q159); that no penalty is imposable for bona fide errors, negligence or lapses if there is no revenue implication as held in the case of Videocon Ltd. v. C.C.E. -1994 (74) E.L.T. 873 (T).
3. Shri Y.R. Kilania, ld. D.R. submitted that there is no excuse for ignorance of law. They should have obtained the requisite Code Number before importing the laser equipment.
4. I have considered the submissions of both sides. I observe that even Commissioner of Customs, who adjudicated the matter, has mentioned in the impugned order that the appellants had imported the goods first time. How- ever, he held that the ignorance of formalities cannot be ignored. No doubt it is the requirement of the provisions of the Foreign Trade (Development and Regulation) Act, 1992 that import or export can be made only under the Importer Exporter Code Number granted by the Director General. But not obtaining the requisite code would not make the import illegal as it is a procedural requirement. It has been held by the Supreme Court in Mangalore Chemicals & Fertilisers v. Dy. Commissioner - 1991 (55) E.L.T. 437 (S.C.) that denial of benefit should flow from the non compliance. The consequence would indeed be the result if the condition was a substantive one and one fundamental to the policy. "The stringency and mandatory nature must be justified by the purpose intended to be served. The mere fact that it is a statutory does not matter one way or the other. There are conditions and conditions some may be substantive, mandatory and based on consideration of policy and some others may merely belong to the area of procedure. It will be erroneous to attach equal importance to the non observance of all conditions irrespective of the purpose they were intended to serve. A distinction between the provisions of statute which are of substantive character and were built in with certain specific objectives of policy on the one hand and those; which are merely procedural and technical in their nature on the other must be kept clearly distinguished." In the light of this judgment of the Apex Court, it is felt that the requirement of obtaining the Code Number was a procedural requirement and mere non observing of the same should not lead to confiscation of the impugned goods under Section 111(d) of the Customs Act as the sub-section provides for confiscation of goods in case of import contrary to any prohibition. Accordingly I set aside the confiscation of the impugned goods. No doubt the penalty is imposable on the appellants but it has to be commensurate with the offence and taking into consideration the gravity of offence as held in the case of C.C. v. Skefko (India) Bearing Co. Ltd. (supra), it is viewed that ends of justice would be met if the appellants are asked to pay the penalty of Rs. 1,000/- only. I accordingly reduce the penalty from Rs. 50,000/- to Rs. 1,000/-only. The appeal is thus disposed of in the above terms.