Page 301 - ELT_15th July 2020_Vol 373_Part 2

2020 ] AGARWAL INDUSTRIAL CORPORATION LTD. v. COMMR. OF CUS., MANGALORE 283
and the Capt. Krishna Kumar Rs. 1,00,000/- (Rupees One lakh only) and
Rs. 50,000/- (Rupees Fifty thousand only) under Section 114AA was also im-
posed on Krishna Kumar and they have paid those penalties and have not chal-
lenged the decision imposing penalties on them. It is only the appellant who
have challenged the imposition of redemption fine and penalties.
3. Heard both the parties and perused the material on record.
4. Learned Counsel for the appellant submitted that the impugned or-
der is not sustainable in law as the same has been passed without properly ap-
preciating the facts, evidence on record and the statutory provision governing
the confiscation and imposition of fine and penalty. He further referred to the
provisions of Section 111(d) and 111(m) of the Customs Act and submitted that
the confiscation of the imported goods under these provisions of Customs Act is
not correct in law. He then referred to Section 111(d) of Customs Act, 1962 which
reads as under :
“any goods which are imported or attempted to be imported or are
brought within the Indian Customs waters for the purpose of being import-
ed, contrary to any prohibition imposed by or under this Act or any other
law for the time being in force.”
4.1 He further submitted that Section 111(d) can only be invoked where
the goods are imported in contrary to any prohibition imposed either under the
Customs Act or any other law, for the time being in force. He further submitted
that the case of the Revenue in the impugned order is that the appellant has vio-
lated the provisions of RBI Circular No. 31, dated 27-12-2010 read with Foreign
Exchange Management (Manner of Receipt and Payment) Regulations, 2000 in
terms of which the trade transactions with Iran should be settled in any permit-
ted currency from outside ACU mechanisam (Asian Clearing Union). He further
submitted that in the present case, it is a admitted position as reflected in the
show cause notice also that the impugned goods i.e., bitumen is not prohibited
goods either under the Customs Act or the Foreign Trade Policy or any other law
in force at the time of importation of said goods. He further submitted that there
was no prohibition for import of goods from Iran either under the Customs Act
or the Foreign Trade Policy or any other law in force. He further submitted that
once the goods imported is not prohibited and therefore the importation made
by the appellant is legal and cannot be said to be imported against any prohibi-
tion. Further, the appellant had made payment to the overseas supplier located
in Dubai through proper banking channels on a bona fide belief that the country
of origin of the impugned import consignments are of “UAE”. He further sub-
mitted that even after the settlement of payment for trade transaction with Iran is
not in accordance with the prescribed procedure by the RBI read with Regula-
tions under FEMA, the same would not in any way make the import transaction
prohibited to bring the transaction under the provisions of Section 111(d) of the
Act. He then referred to Section 111(m) of the Customs Act which reads as fol-
lows.
“any goods which do not correspond in respect of value or in any oth-
er particular with the entry made under this Act or in the case of baggage
with the declaration made under Section 77 in respect thereof, or in the case
of goods under transshipment, with the declaration for transshipment re-
ferred to in the proviso to sub-section (1) of the Section 54.”
4.2 He further argued that even the provision of Section 111(m) is not
applicable in the present case because the said provision comes into play when
the imported goods do not correspond to the value or any other particulars
which are statutorily required to be declared in the bills of entry in terms of Sec-
EXCISE LAW TIMES  15th July 2020  301