CESTAT upholds Penalty Imposed for Confiscation of goods Falls under “Light Oil” on Ground of Violation of Policy Conditions of Foreign Trade Policy [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the redemption fine and penalty imposed for the confiscation of goods that falls under the category of ‘light oil’ on the ground of violation of policy conditions of foreign trade policy(FTP). 

M M Trading Company, the appellant assessee filed a Bill of Entry for clearance of 198.32 Mts of “Industrial Composite Mixture” classifying the goods under the category of mineral oil. 

The assessee appealed against the order passed by the Commissioner for confirming the confiscation of goods valued at Rs.82,57,557/- under Section 111(d) and 111(m) of the Customs Act, 1962, and for the imposition of a penalty of Rs.2,00,000/- on the appellant under Section 112(a)(i) of the Customs Act. 

N D George, the counsel for the assessee contended that the department failed to appreciate that on examination it was found that the goods were declared as an “Industrial Composite Mixture”, however, based on the test report, the goods were found to be light oil and there was no change in the rate of duty in case the goods are light oil. 

Further submitted that there was no case for confiscation under Sections 111 (d) and 111(m) of the Customs Act as the goods are freely importable as an industrial composite mixture. 

Anand Kumar, the counsel for the department relied on the decisions made by the lower authorities and contended that the penalty imposed for the confiscation of goods was as per the law and liable to be sustained. 

The Bench observed that the imported goods are composed of a mixture of mineral Hydrocarbon having an initial boiling point of 158 C. Final Boiling Point of 212° C, Flash Point of 41° C, Density of 15° C – 0.7830 gm/ml and it was light oil and the imported cargo was other than the declaration and they are other than Industrial Composite Mixture and it was Light Oil. 

The two-member bench comprising Somesh Arora (Judicial) and Raju (Technical) held that the present appeal was devoid of merits both on classification issues as well as violation of foreign trade policy and penalties imposed are upheld while dismissing the appeal filed by the assessee. 

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