TMI Blog2020 (12) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... be redeemed on payment of fine in lieu of confiscation; in case of prohibited goods, the adjudicating authority has an option to allow the goods to be redeemed or to confiscate the goods absolutely. Whether absolute confiscation can be ordered in respect of goods which are not primarily prohibited goods but have acquired the nature of prohibited goods by virtue of the definition under Section 2(33) has been a subject matter of many judicial pronouncements - Courts and Benches of the Tribunal have been consistent in holding that such goods shall be allowed to be redeemed on payment of fine in lieu of confiscation. Though the Customs Act does not find mention of restricted goods , the Foreign Trade Policy along with Act and Rules made thereunder distinguish restricted and prohibited goods - it is provided that in respect of prohibited goods, the adjudicating authority may go for absolute confiscation. However, in respect of restricted goods, which are mostly commercial goods, the adjudicating authority can release the goods on payment of fine in lieu of confiscation. In the instant case, the appellant is an actual user and had been importing green peas regularly. In r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants submits that earlier the import of pulses were freely importable; DGFT brought the same under restricted category and invited application for allotment of quota from importers whose have own mill facility; the appellant being eligible to import such pulses, applied for the same; meanwhile DGFT issued the above notification without taking any steps on their application; as the availability of goods was dependent on season and due to undue delay in finalization of their request by DGFT, they were forced to import the impugned goods; they do not dispute the confiscation of goods as Apex Court vide judgment dated 2608/2020 in Transfer petition Civil Nos. 496-509 of 2020 upheld the notification restricting import of said goods. 3. Learned counsel also submits that Section 125 of the Customs Act gives an option to pay fine in lieu of confiscation; sub-section (1) provides that whenever confiscation of any goods is authorized by the Customs Act, the officer adjudicating it, in the case of any goods the importation or exportation whereof is prohibited for the time being in force, may and in the case of other goods, shall give to the owner of the goods or the person concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h law; Commissioner Mumbai allowed to redeem 2500 MT of pulses on payment of fine in lieu of confiscation and penalty. As the department delayed clearance of the goods, the importer approached the Hon ble High Court of Bombay, who vide order dated 15-10-2020 Harihar Collections and Others (in WP 3502 to 3503/2020) allowed release of the goods. 6. Learned Counsel further relied upon the following. i. Atul Automations Pvt. Ltd 2019 (365) ELT 465 (SC) ii. Parag Domestic Appliances 2018 (360) ELT547 (Tri. Bang upheld in 2018 (361) ELT 221 (Ker) iii. Horizon Ferro Alloys Pvt. Ltd. 2016 (340) ELT 27 (P H) 7. Learned Authorised Representative for the Revenue reiterates the findings of OIO and submits that as import conditions were violated in the instant case, goods were confiscated; redemption was not allowed in this case based on the stand taken by the Union government in the Hon ble Supreme Court that release of such imports would be against the interests of the farmers in India; the condition of import was at the Minimum Import Price (MIP) @ ₹ 200/ CIF per kg, whereas the appellants @ ₹ 37.75 per kilogram only; if such imports are all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported or exported, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either 'absolutely' or 'subject to such conditions' to be fulfilled before or after clearance, as may be specified in the notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specified in sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods. This is also made clear by this Court in Sheikh Mohd Omer v Collector of Customs, Calcutta and Ors. (1970 (2) SCC 728) wherein it was contended that the expression 'prohibition' used in Section 111(d) must be considered as a total prohibition and that the expression does not bring within its fold the restrictions imposed by Clause (3) of the Import Control Order, 1955. The Court negatived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Government. 11. Learned Authorised Representative further submits that this order was passed a week before the Hon ble Supreme Court passed the order, in the case of Agricas LLP others, upholding the power of Government in issuing the notification restricting the import of pulses; another writ filed by the appellants, against the earlier order, was dismissed by the Division bench of the Hon ble High Court of Kerala while directing the Customs authorities to conclude adjudication expeditiously. 12. Heard both sides and perused the records of the case. Brief issue involved in the case is as to whether confiscated goods, which have acquired the nature of prohibited goods by virtue of the deeming definition under Section 2(33) of Customs Act, 1962, can be released on payment of redemption fine in terms of Section 125 of Customs Act, 1962. It is seen that the appellant had been a regular importer of different pulses including peas; they made an application dated 22.4.2020 before the DGFT to permit import of peas which are restricted in terms of Notification No.37/2015-20 dated 18.2.2019. The appellant claims that as the material was urgently required by them and as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods have been imported in violation of the conditions of the EXIM Policy Notification cited above. By virtue of the same, the goods have acquired the nature of prohibited goods in terms of Section 2(33) of Customs Act, 1962 and have become liable for confiscation in terms of Section 111(d) ibid. Now, the question arises as to whether the adjudicating authority has an option to allow such goods to be redeemed on payment of fine in lieu of confiscation. In terms of Section 125 of the Customs Act, 1962, in case of goods other than prohibited goods, the adjudicating authority shall allow the goods to be redeemed on payment of fine in lieu of confiscation; in case of prohibited goods, the adjudicating authority has an option to allow the goods to be redeemed or to confiscate the goods absolutely. Whether absolute confiscation can be ordered in respect of goods which are not primarily prohibited goods but have acquired the nature of prohibited goods by virtue of the definition under Section 2(33) has been a subject matter of many judicial pronouncements. We find that Courts and Benches of the Tribunal have been consistent in holding that such goods shall be allowed to be redeemed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating authority. 17. On going through the different judicial pronouncements on the issue, it appears that though the Customs Act does not find mention of restricted goods , the Foreign Trade Policy along with Act and Rules made thereunder distinguish restricted and prohibited goods. The ratio of the judgments goes to draw a distinction between these goods. Prohibited goods have a certain quality associated with them, that is to say the goods which have an intrinsic taint, being harmful to the public health, public order, national security, etc., for example, arms and ammunition, narcotic drugs, etc., are prohibited absolutely. Other goods are restricted that is to say that the import is permitted on fulfilling certain conditions like having a license, etc., from DGFT. There is a discernible distinction between these two types of goods. Therefore, it is provided that in respect of prohibited goods, the adjudicating authority may go for absolute confiscation. However, in respect of restricted goods, which are mostly commercial goods, the adjudicating authority can release the goods on payment of fine in lieu of confiscation. 18. In the instant case, we find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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