2018 (3) TMI 1262 - AT - Customs

EPCG Scheme - import of restricted item - it was alleged that since the CIF value of the marble slabs under import was US 38.470 PSM which is less than US 50 PSM the said import is not allowed and the goods are liable for confiscation - Held that - there is no dispute that the appellant have contravened the provisions of Foreign Trade Policy by which goods valued below US 50 falls under the restricted category for which the licence is required for import. Though the appellant have imported goods valued at US 38.470 PSM CIF but did not obtain the licence. Accordingly the goods imported is restricted - confiscation upheld. Considering the fact that the appellant is the actual user and there is no malafide intention in not obtaining the licence the appellant deserve leniency - the redemption fine and penalty in the impugned order is at higher side which needs to be reduced. Appeal allowed in part.

Summary

Issues:
Violation of Foreign Trade Policy regarding import of marble slabs valued below US $ 50 PSM under EPCG scheme.

Analysis:

1. Facts of the Case:
The appellant imported marble slabs valued at US $ 38.470 PSM under the EPCG scheme, which required a CIF value of US $ 50 PSM for unrestricted import. The goods were confiscated and fines imposed due to non-compliance with the policy.

2. Appellant's Arguments:
The appellant, represented by a Chartered Accountant, argued that they ordered marble slabs at US $ 35 PSM but imported them at US $ 38.470 PSM due to a delay in the process. They believed the marble was under Open General License (OGL) and that the value of US $ 50 PSM was met, thus no confiscation was warranted.

3. Legal References:
The appellant cited various judgments to support their case, emphasizing their actual user status and lack of mala fide intent. They also argued for leniency in penalties based on previous cases.

4. Respondent's Position:
The Additional Commissioner argued that the appellant violated the Foreign Trade Policy by importing marble below the required value of US $ 50 PSM, justifying the confiscation of goods. Reference was made to a Tribunal judgment supporting this position.

5. Tribunal's Decision:
The Tribunal acknowledged the violation of the Foreign Trade Policy by the appellant for importing goods valued below the specified amount. Despite recognizing the lack of malafide intent, the goods were rightfully held liable for confiscation.

6. Judgment and Reduction of Penalties:
Considering the appellant's actual user status and absence of malafide intent, the Tribunal reduced the redemption fine from &8377; 13 lakhs to 5 lakhs and the penalty from &8377; 4 lakhs to 1 lakh, finding the original amounts excessive.

7. Conclusion:
The appeal was partly allowed with reduced fines, balancing the violation of the Foreign Trade Policy with the appellant's circumstances and intentions, as pronounced in court on 28/02/2018.