By TIOL News Service:

MUMBAI, MAY 13, 2016: THE appellant filed shipping bills on 10/2/2011 and 16/2/2011 for exports of skimmed milk powder.

Export of skimmed milk powder was prohibited by DGFT vide notification NO. 23 (RE-2010)/2009-2014 dated 18/2/2011.Later, vide notification no. 37(RE-2010)/2009-2014 dated 24/3/2011, export of skimmed milk powder was permitted in respect of such consignment only which were handed over to customs for examination and export on or before 18/2/2011.

The exporter applied for permission to take the goods back to town which was earlier carted into customs area on22/2/2011 and 23/2/2011. The goods were not handed over to customs for examination and export till 18/2/2011 instead permission for back to town of the said goods was sought vide letter dated 25/4/2011 after gap of more than two months.

The said carted goods, therefore, became prohibited goods and could not be exported.

Taking the view that the goods appeared to be an attempt to export in violation of the provisions of the Customs Act, 1962, the adjudicating authority held the goods liable for confiscation and also penal action.

The exporter is, therefore, before the CESTAT.

It is inter alia submitted that when the shipping bills were filed on10/2/2011 and 16/2/2011 there was no prohibition for export of skimmed milk powder and even on date of carting the goods on 23/2/2011, transition provisions were available for the appellant in terms of para 1.5 of Foreign Trade Policy;that notification dated 24/2/2011 put certain condition of stage of goods i.e. examination and export on or before 18/2/2011; at the most, if the export is not permissible, the Adjudicating authority should have allowed the goods to be brought back to town and, accordingly, there is no question of confiscation and penalty of the said goods.

The AR, while reiterating the findings of the original authority, submitted that under whatever circumstances, if the goods become prohibited and are lying within the customs areas,same shall be liable to confiscation.

The Bench observed -

++ From Section 50 it can be seen that the stage of the entry of the goods to be exported shall be the date on which the exporter presents shipping bills to the proper officer.

++ In the present case the shipping bills was presented on10/2/2011 and 16/2/2011 and on the date of entry of the goods the goods, was not prohibited. The goods arrived at the customs area on22/2/2011 and 23/2/2011 even if these dates are considered, on these dates also goods were not prohibited as per notification No. 23(RE-2010)/2009-2014 dated 18/2/2011 read with transitional provision as provided under para 1.5 of Foreign Trade Policy, 2009-2014 therefore even though the goods were declared prohibited on 18/2/2011 transitional provision was restricted in certain condition by notification No. 37(RE-2010)/2009-2014 dated 24/3/2011.

++ But the fact remains that on the date of entry of the goods in terms of Section 50 the goods were not prohibited therefore confiscation under Section 113(d) was not warranted. It is also noted that at the time of opening L.C., dispatch of the goods from the factory to the port, filing of shipping bill before the customs, the goods were not notified as prohibited goods, therefore, it is beyond the control of exporter to avoid the dispatch of the goods from the factory to the port.

Holding that there is no reason for confiscation of the goods, the order was set aside and the appeals were allowed with consequential relief.

(See 2016-TIOL-1137-CESTAT-MUM)