Dr. Sunil Bhoolabhai vs Commissioner Of Custom-Air Special Cargo

Ajay Sharma, Member (J)

The instant appeal has been filed assailing the impugned order dated 14.02.2022 passed by Commissioner of Customs (Appeal) Mumbai Zone-II, by which the learned Commissioner while upholding order passed by the adjudicating authority rejected the appeal of the appellant.

The facts leading to the filling of the instant appeal are stated in brief as follows. The appellant is a general Dentist and is practicing Dentistry in Mumbai. He is a member of Wings India Radio Control Flyers Club, Mumbai since last 36 years. He imported a RCRCM Typhoon glider from Belgium for the purpose of statistic display at his clinic. Since the same was imported without radio control therefore it was offered at a discounted price of Rs.11945/- even though the price of the product as per the official Website was US $439.99. According to the department import of Unmanned Aircraft System (UAS) Unmanned Aerial Vehicle (UAVs)/ Remote Piloted Aircrafts (RPAs)/ drones which are classifiable under CTH8802 are restricted requiring prior clearance from the Directorate General of Civil Aviation (DGCA) except for category (a) to (i) listed in the policy and as per DGFT notification No. 16/2025-2020, dated 27.07.2016 import license is required from DGFT and also to obtain NOC from DGCA before releasing the goods as the goods in question are not freely importable through courier in personal name. Since the appellant (Consignee) did not fall in the exception as mentioned in category of the policy condition (a) to

(i) and failed to produce import license and DGCA NOC, the consignment was sized under seizure memo dated 02.02.2021 and culminated in the Adjudication Order dated 18.08.202 for absolute confiscation of the imported goods under Section 111

(d) of the Customs Act, 1962 alongwith the penalty of Rs.5000/-u/s. 112(a) and 158(2)(ii) ibid respectively. Being aggrieved the appellant preferred appeal before the first appellant authority i.e. Commissioner of Customs (Appeals) who vide impugned order dated 14.02.2022 rejected the same.

During the course of arguments learned Counsel for the appellant submitted that the appellant does not want to keep the imported goods i.e. RCRCM Typhoon and wants to re-export the same. According to learned Counsel it is well settled through various decisions of this Tribunal alone that when the goods are not importable due to certain restrictions, option of re-export can be granted. In support of this submission learned Counsel cited on the decision of the Tribunal in the matter of Global Enterprises vs. Commissioner of Customs (NS-V), Nhava Sheva, 2019 (369) E.L.T 1596 (Tri-Mumbai). Per contra learned Authorized Representative reiterated the findings recorded in the impugned order and prayed for dismissal of appeal.

I have heard learned Counsel for the appellant and learned Authorised Representative appearing the behalf of revenue and pursued the case records including the synopsis/ written submission and case laws produced. Since the learned Counsel has confined his arguments only to the extent of permission of re-export of the imported goods and personal penalty therefore, I am dealing with this issue only. I have gone through the decision of this Tribunal in the matter of Global Enterprises (supra) in which although the imported goods were termed as ‘prohibited goods‘ but despite that the same was permitted to be re-exported and. The relevant paragraphs of the said decision are extracted as under:-

“xxx xxx xxx

As the imported goods, though required to be are not complaint with the standards, they fail to overcome the bar of prohibition at the threshold. Hence the question of duty liability, differential or otherwise, will no arise. This is in conformity with the decision of the Hon’ble Supreme Court in re Sewpujanrai Indrasanarai Ltd. That requirement to discharge duty liability will have to be established before it can be demanded. However, failure to comply with the norms prescribed by Bureau of Indian standards would render the goods liable to confiscation. Such liability to confiscation does not necessarily have to be consummated by confiscation under Section 111 of Customs Act, 1962. There is a dangerous consequence to such confiscation. If the option of redemption is not offered, or even exercised, possession of confiscated goods vests with the Central Government which will have to bear the consequences of such possession with attendant cost to the exchequer is to be linked to re-export, it has been held that such non-financial condition cannot be appended for release of goods. Therefore, while upholding the liability of the goods to confiscation, we set aside the confiscation. Consequently, the option to redeem becomes infructuous. We concur with the lower authorities that the goods, being prohibited for import, be re-exported.

Now we turn to the penalty imposed under Section 112 of Customs Act, 1962. The goods were imported for sale in India but were ordered to be re-exported. Penalty is an instrument of deterrence. Re-export is not without any financial consequence to the importer. That should be sufficient deterrent against such imports.

Accordingly, we modify the impugned order and limit the detriment to that of re-export of the said goods without having to redeem the goods ad without being penalized. The appeal is disposed of accordingly.”

Admittedly the imported goods involved herein is restricted. The prior clearance of import and also the license to import have not been taken from the authorities concern, which was incumbent upon the appellant to take beforehand i.e. before the import took place.

So far as the issue of the re-export is concerned, although there is some irregularity on the part of the appellant but looking at the facts of this case and background of the appellant herein who has imported the goods involved herein not for any commercial purpose but only for the purpose of static display in his clinic, I am inclined to permit re-export of aforesaid good as held in the decision cited (supra). So far as personal penalty on the appellant u/s. 112 ibid is concerned, any improper import of goods which has rendered such goods to confiscate, is sufficient to attract penalty u/s. 112 ibid. However, considering the facts and circumstance of this case and the bonafide of the appellant the same is reduced to the amount already paid by him. The impugned order is modified to the extent mentioned hereinabove and the appeal is accordingly disposed off.