Full Judgment
2. The respondents had imported second-hand capital goods and sought its clearance without import licence. The shipment had been made on 1-8-2004 and the relevant Bill of Entry was filed on 9-9-2004. The Customs authorities, after examination of the goods and consideration of the report of the Chartered Engineer, came to the conclusion that the goods were more than 10 years old and hence ought to have been imported only under a specific licence as required under para 2.17 of the Exim Policy 2002-2007. The import was found to have been made in contravention of the Exim Policy and the goods were also found to have been grossly undervalued. Accordingly, the goods were sought to be confiscated under Section 111(d) and (m) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (D&R) Act, 1992. The importer was sought to be penalized under Section 112(a) of the Customs Act. The importer waived show cause notice and personal hearing and insisted on early adjudication of the case. Accordingly, the original authority passed an order confiscating the goods as above with option for redemption thereof on payment of a fine of Rs. 3 lakhs, enhancing the value of the goods to Rs. 16,52,280/- (FOB) under Rule 8 of the Customs Valuation Rules, 1988 and imposing a penalty of Rs. 1.5 lakhs on the importer under Section 112(a) of the Act. This order was taken in appeal by the assessee. The learned Commissioner (Appeals), after hearing the party and considering their submissions, passed an order setting aside the order of confiscation and penalty, passed by the lower authority. The view taken by the learned Commissioner (Appeals) was that the question whether any import contravened any provision of the Exim Policy was to be determined with reference to the law prevailing on the date of filing of the relevant Bill of Entry. The Bill of Entry in the case at hand had been filed on 9-9-2004. The new Foreign Trade Policy 2004-2009 which came into force on 1-9-2004 did not restrict import of second-hand capital goods. As the Bill of Entry was filed after 1-9-2004, the learned Commissioner (Appeals) took the view that the provisions of the new Foreign Trade Policy were applicable to the goods and, therefore, second-hand capital goods of any age could be freely imported without any licence. Thus the goods in question were found to have been imported without contravening any provision in/under the Customs Act. Hence the order setting aside the confiscation and penalty. This order of the learned Commissioner (Appeals) is presently under challenge in the present appeal, 3. The learned Jt. CDR submits that the date which is relevant to the question whether any import of goods contravened the provisions of the import policy is the date of shipment of the goods in so far as Section 111 of the Customs Act, 1962 is concerned. This argument is contested by the learned Counsel for the respondents, who submits that what appears from the text of clause (d) of Section 111 is that the date on which the goods entered the Indian customs waters is relevant to the question whether any provision of import policy has been infringed by the goods. In support of the arguments on "relevant date" the learned Jt. CDR has relied on the decisions cited in the grounds of this appeal. No contra decision has been cited before me. However, in a broader perspective, I observe that the provisions of Section 111(d) ought to have been examined by the lower appellate authority before venturing into the finding that the subject goods were not liable to confiscation. Section 111(d) reads as under : Confiscation of improperly imported goods etc. The following goods brought from a place outside India shall be liable to confiscation : (d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force.
It would appear from the above provision that there are three factual situations (involving the goods) contemplated thereunder. These are : (c) Goods which are brought within the Indian customs waters for the purpose of being imported.
It has to be ascertained as to which of these factual situations is most appropriate to the subject goods in the context of determining whether the goods are liable to confiscation. The Bill of Entry was filed on 9-9-2004. Learned Counsel has submitted that the goods reached the Indian customs waters a couple of days back. It, thus, would appear that the events mentioned at (a) and (c) above happened after 1-9-2004, i.e. the date on which the new policy came into force. However, the contentious issue in this case is in relation to (b) above. The question is whether the goods were attempted to be imported prior to 1-9-2004. Admittedly, the goods were supplied by a foreign company acting upon a purchase order placed on them by the importer. The goods were shipped on 1-8-2004. The immediate question is whether the shipment of the goods by the supplier acting on the importer's purchase order would constitute attempt of import for the latter. The learned Commissioner (Appeals) seems to have had no occasion to harp on this question. I am of the view that this question has got to be addressed by the Commissioner (Appeals) after hearing both sides.
4. The impugned order is set aside and the learned Commissioner (Appeals) is directed to pass a fresh speaking order after giving both sides a reasonable opportunity of being heard on all the issues including the one noted above. The appeal stands allowed by way of remand.