By TIOL News Service

MUMBAI, MAR 08, 2017: THIS is a Revenue appeal filed in the year 2006 against the order passed by the Commissioner of Customs (Import), Mumbai.

The respondent M/s Marigold Productions Pvt. Ltd was proceeded against for importation of 'film camera and shooing equipment' valued at Rs.1,07,78,656/- without having obtained the Import-Export Code (IEC) stipulated in paragraph 2.12 of Foreign Trade Policy 2004-09 notified by Director General of Foreign Trade under the FTDR, 1992.

The adjudicating authority held that there were no malafides , that the goods had been imported for temporary use and that the importer had undertaken to acquire such code before exporting the goods. He dropped the proceedings.

As mentioned, Revenue is in appeal and contends that the adjudicating authority is not vested with the discretion to drop proceedings initiated for action under section 111 and 112 of Customs Act, 1962.

None appeared for the respondent, therefore, after hearing the AR, the Bench observed -

+ Doubtlessly, the importer was not in possession of Import Export Code (IEC) which is mandated as a pre-requisite for effecting imports. It is alleged that the importer does not fall within any the categories listed as exempt from this requirement. It is again without doubt that contravention of any requirement laid down by any other law in relation to imported goods would render them liable to confiscation. There is no allegation of any attempt to evade duty by suppression of fact of import or its value. Nor is a licence required for import of the impugned goods.

++ Undoubtedly, the contravention listed in section 111 shall render the goods liable for confiscation. Nevertheless, section 124 specifically enjoins issue of notice and a hearing as a pre-requisite to ordering confiscation. Impliedly, the alleged contravention is open to defence which could lead to release from liability to confiscation.

++ An Import Export Code does not purport to be a licence to import goods. It can be acquired by a simple procedure and is generally applied for by regular importers. A causal importer may not be sufficiently aware of the requirement that code is to be procured.

++ The adjudicating authority has taken note of the circumstances and has taken the stand that this is a remedial lapse. Even if the goods were confiscated, it was open to the adjudicating authority to allow redemption on nominal fine and to impose nominal penalty. In the absence of any special commercial advantage derived from import without a code, fine and penalty is not likely to be anything other than nominal. Such action does not acquire even the patina of deterrence and example.

Holding that there is no justification to interfere with the impugned order, the Revenue Appeal was rejected.

(See 2017-TIOL-728-CESTAT-MUM)