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2019 (11) TMI 192

..... have imposed redemption fine on the goods imported by them and cleared provisionally? HELD THAT:- The appellants contended that in view of the Stay granted, by the Hon’ble High Court of Kerala, on the operation of Notification cited, they have not violated any prohibition and that the agreements for sale of RBD Palm Oil or Palmolein have taken place when the prohibition was not even notified and therefore, in terms of Para 1.5 of the provisions of Foreign Trade Policy, they have not violated any prohibition imposed on the import of impugned goods. The defence of Department is that the Final Order of the Hon’ble High Court of Kerala dismissed the Writ Petition filed by the appellants thereby the position existing before the grant of Stay stands and thus it should be held that the appellants have imported impugned goods contrary to the prohibition in place. The Department also contends that the appellants have not submitted any concrete proof that the conditions of Para 1.5 of the FTP have been satisfied so as to be eligible for the imports despite the prohibitions. The appellants have submitted a few disconnected documents which look like sale deeds, contracts, agreement .....

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..... rious ex-bond bills of entry. The appellants were issued Show Cause Notices dated 17-12-2008 and 6-11-2008 respectively seeking to confiscate the imported cargo under section 111(d) of the Customs Act, 1962 and seeking to impose penalty under Section 112(a) ibid. Commissioner of Customs, Cochin vide order No 41/2009 dated 27-03-2009 and 42/2009 dated 3.4.2009. Commissioner has imposed a penalty of ₹ 1.40 Cr and 1.75 Cr respectively on the appellants. However, the Commissioner has not imposed any fine in lieu of confiscation on the grounds that the goods were not physically available for confiscation. M/s Parisons Agrotech, vide appeal C/452/2007 and M/s Parisons Foods P Ltd, vide appeal C/453/2007, are against the imposition of penalty under Section 112(a) of Customs Act, 1962. Revenue are in appeal, vide appeals C/446/2007 and C/447/2007, against non-imposition of fine in lieu of confiscation. 2. The learned counsel for appellants submits that the imports were effected when the stay granted by Hon ble High Court of Kerala was in operation; the Notification was not in force; further the High Court has specifically permitted the appellants to discharge cargo; as long as the st .....

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..... aim of the appellants is that Hon ble High Court of Kerala issued Interim Stay Order (with modification & clarification) dated 25.10.2007, 20.11.2007 & 01.12.2007 and as such the Notification would be deemed to be not in operation during the relevant period and that when the Stay was in force, it cannot be stated that the imports made by them were contrary to the prohibition imposed under Customs Act, 1962. He submits that in case the Hon ble High Court quashed the DGFT Notification, Appellants can very well claim that the DGFT Notification is not in force; when the impugned Notification is Stayed by issuing Interim Stay Order , it only meant that due actions to be taken , under Sections 111(d), 125, 112(a) under Customs Act, 1962, are only suspended/withheld temporarily till the core issue in the Writ is decided on merit. He submits that stay of operation of any Notification does not wipe out the very existence such statutory Notification; Hon ble Supreme Court in the case of Shree Chamundi Mopeds Ltd Vs Church of South India Trust Association, Madras 1992 (3) S.C.C.1, held that "While considering the effect of an interim order staying the operation of the order under .....

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..... ing the jurisdiction of the court must be neutralised, as the institution of litigation cannot be permitted to confer any advantage on a party by the delayed action of the court." He submits that by applying the ratio of the above judgement the instant Interim Stay Order was merged with the final Writ Order and thereby the Interim Order was nullified. Consequently, the impugned Interim Stay Order was non est in the eyes of law by applying the Doctrine of Merger Principle. 3.3. Learned Commissioner, AR further submits that in case of M/s Kanoria Chemicals Vs U.P. State Electricity Board (1997) 5 SCC 772, Hon ble Apex Court observed that It is equally well settled that an order of stay granted pending disposal of a writ petition/suit or other proceeding, comes to an end with the dismissal of the substantive proceeding and that it is the duty of the court in such a case to put the parties in the same position they would have been but for the interim order of the court. Any other view would result in the act or order of the court prejudicing a party [Board in this case] for no fault of its and would also mean rewarding a writ petitioner in spite of his failure. Learned Commissione .....

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..... ere imported by the importer through the prohibited PORT against the DGFT Notification and thus it is established that the impugned Palm Oil were liable for confiscation. Hence, the plea of the importer that penalty should be confined only to willful acts of omission and commission in contravention of the provisions of an enactment cannot be accepted. Penalty must be imposed on a person who acts in conscious disregard of statutory obligations and suppresses material facts. Though existence of mens rea is essential with reference to penal provisions of Section 112(b) (knows or reason to believe), 114A (willful misstatement) & 114AA (knowingly or intentionally) of the Customs Act,1962, there is no such requirement of the element of Mens Rea / Mala fide for imposition of penalty under Section 112(a) of the Customs Act, 1962. Penalty can be imposed, only when it is established that the goods imported are liable to confiscation under Section 111 of Customs Act, 1962. He relies upon (i). M/s Oceanic Shipping Agency P Ltd Vs CC 1996 (82) ELT 57 (Para.10) (ii). M/s Panorama V CC 2001 (130) ELT 877 (Para 5) 3.6. Learned Commissioner, AR submits further that the Adjudicating Authority ha .....

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..... he absence of any further documentary proof They are not in the nature of sales contract. Addressee is mentioned as M/s Parisons Exports Inc, India, Indonesia Sl No.7 of HSS : Open General License under Import Export Policy 1997-2002 (Non-Existing Policy) It should be FTP : 2004-2009 considering B/L date 2.11.2007; Date of Purchase of Stamp Paper is not available in the Copy produced As per this Sales Terms of Annex J, the Shipment is to be effected during 1st October to 31st October 2007. Whereas, the impugned Bill of Lading referred in the HSS is dated 2.11.2007 As per condition 8 of Sl. No. 18 of Annex J, the Discharge Port is actually meant for Beypore Port (10 km from Calicut, 195 km from Kochi), where no ban is imposed by the DGFT Notification during the material period. (*Different discrepancies in different documents; summarised for ease of reference) He submits that in view of the submissions and legal position, the appeals of the appellants are liable to be rejected and the appeals filed by Revenue are liable to be allowed. 4. Heard both sides and perused the records of the case. The brief issue that requires consideration in this case is as to whether the appellants have .....

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..... ed at ₹ 10.43 crores (Tariff Value ₹ 5.78 crores). 6. Learned Commissioner AR submits that the appellants have mis-conceived the legal position on Interim Stay Order; Hon ble High Court of Kerala has only stayed the operation but have not set aside the Notification. That means that Hon ble High Court has stayed only the due action to be taken by the Department in respect of the impugned goods. Relying on Hon ble Supreme Court decision in the case of Sh. Chamundi Mopeds (Supra). He submits that quashing of an order results in the restoration of position as it stood on the date of the passing of the order which has been quashed; the stay of operation of an order does not, however lead to such a result; it only means that the order which has been stayed would not be operative from the date of the passing of the Stay Order and it does mean that the said order has been wiped out from existence. He also submits that Hon ble Supreme Court in the case of Indian Counsel for Enviro Legal Action (Supra) observed that when a party applies and gets a stay or injunction from the Court, it is always at the risk and responsibility of the party applying. Learned Commissioner arguing on .....

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..... by the restriction imposed by the Notification cited supra. We find that Para 1.5 of Foreign Trade Policy reads as under: 1.5 In case an export or import that is permitted freely under this Policy is subsequently subjected to any restriction or regulation, such export or import will ordinarily be permitted notwithstanding such restriction or regulation, unless otherwise stipulated, provided that the shipment of the export or import is made within the original validity of an irrevocable letter of credit established before the date of imposition of such restriction. Ongoing through the records of the case, we find that the appellants have submitted a few disconnected documents which look like sale deeds, contracts, agreements etc., however as pointed out by the Learned Commissioner AR, the documents are full of inadequacies making the authenticity of the documents subject to doubt. It is also not coming forth as to which of these documents pertain to the impugned imports. Moreover, we do not find any conclusive agreements indicating that an irrevocable letter of credit has been opened or has been enforced at the time of shipment. We find that Learned Commissioner has also observed in .....

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