Whether Re-export and sale of used moulds without prior permission of DGFT is liable for confiscation and penalty?

PJ/CASE LAW/2016-17/3065

Case-GOODYEAR SOUTH ASIA TYRES P. LTD. VersusC.C., ICD, MALIWADA, AURANGABAD
Citation-2016 (331) E.L.T. 474 (Tri. - Mumbai)
Issue-Whether Re-export and sale of used moulds without prior permission of DGFT is liable for confiscation and penalty?
Brief Facts-The brief facts of the case are that the appellant imported old moulds required for the manufacture of tyres from M/s. Goodyear Phillippies Inc., Philippines and were cleared on payment of appropriate duty. After receipt of the goods, appellant was not satisfied with the quality of the old moulds and it is claimed these were of no use to them. After one year and nine months they exported back these moulds to the supplier. Revenue’s contention is that as per the provisions of Para 2.3 of the Handbook of Procedures at the relevant time the appellant could not have sold mould without prior permission from DGFT. The case was adjudicated. Goods were confiscated, redemption fine of Rs. 1,24,000/- in lieu of confiscation, equal amount of penalty was imposed under Section 114 of the Customs Act, 1962.
Appelants Contention-Ld. counsel submitted that relevant Para 2.3 of the Handbook of Procedures is for sale within India. In their case, moulds were re-exported and hence said para is not applicable. Learned counsel further submitted that purpose of the said para is to prohibit trading in old capital goods and in their case it is not the trading but since imported mould were not usable by them, they were forced to sell it back to their original supplier and thus sale in this case is technical in nature.

Respondents Contention-Ld. AR reiterates the observations made in theimpugned order.

Reasoning Of Judgement-The tribunal have considered the rival submissions and find that it is not in dispute that goods were sold and re-exported. They note that relevant para of the Handbook Procedures makes no distinction between sale within India and sale outside India and therefore, there is violation of provisions of Import and Export Policy/Handbook of Procedures. Confiscation of the goods therefore, is upheld. However, keeping in view the facts and circumstances of the case, redemption fine is reduced to Rs. 50,000/-.they do not find it to be fit case for imposing penalty. Penalty is therefore, set aside. Appeal is dismissed except the above modification.

Decision-Appeal dismissed

Comment-The gist of the case is that as in the given case assessee after using imported Moulds in production of their goods, re-export same after 1 year 9 months. And, as per Para 2.3 of Handbook of Procedures, such goods could not have been sold, whether in India or abroad, without prior permission of DGFT. And, accordingly for violation of said provision, goods rightly confiscated. But in view of overall circumstances redemption fine reduced and penalty set aside.
Prepared By-Neelam Jain

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PJ/CASE LAW/2016-17/3065

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