Green Peas removed from ‘Free’ to ‘restricted category’ Prior Authorization required: CESTAT refuses to issue Demurrage Waiver Certificate to Importer [Read Order]

Green Peas - CESTAT - demurrage waiver certificate - Importer - Taxscan

The Hyderabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) refused to ​​issue a demurrage waiver certificate to Importer and held that Green Peas removed from ‘free’ to ‘restricted category’ prior authorization required.

The appellant, M/s. Oscar Pvt. Ltd. Kakinada imported 6479.30 MTs of ‘Green Peas’ falling under CTH 0713 against 21 bills of lading through Visakhapatnam Seaport. Out of this, 09 bills of entry were filed initially. As per DGFT Notification No. 37/2015-2020 dated 18.12.2019, the import of peas is restricted.

The appellant importer had obtained a stay order against the above Notification or Trade Notices issued by DGFT from the High Court of Andhra Pradesh. However, the Supreme Court in Transfer Petition (Civil) upheld the validity of Notification and the Trade Notice imposing restriction of import of peas.

It appeared to the department that the appellant has violated the provisions of Foreign Trade Policy 2015 – 2020 and thereby goods under import are liable for confiscation under the provisions of Customs Act, 1962. The goods lying in Visakha Container Terminal CFS and Sravan CFS, Visakhapatnam were restrained under section 110 of the Customs Act, 1962. The appellant waived the issuance of Show Cause Notice. After granting a personal hearing the matter was adjudicated.

The major contention put forward by the department was that the adjudicating authority ought not to have allowed redemption of the goods as it negates the intention of the Government in issuing the Notification. The department prayed for an order of absolute confiscation of the goods. The Commissioner (Appeals) vide order impugned herein allowed the appeal filed by the department thereby setting aside the order of the adjudicating authority allowing redemption of the impugned goods under Section 125 (1) of the Customs Act, 1962.

The coram of Judicial Member, Sulekha Beevi C.S. and Technical Member P. Venkata Subba Rao stated that the goods have been confiscated for violation of the Notification / Trade Notice. These are serious infractions on the part of the appellant importer. After the issuance of the notification, the appellant approached the jurisdictional High Court and on the basis of interim stay of the notification, he proceeded to import the subject goods. There were decisions rendered by various other High Courts (Madras, Gujarat) which upheld the validity of notification. The appellant was aware that there were decisions against him. The appellant has taken a chance of importing the goods after filing the writ petition and obtaining a stay from the jurisdictional High Court. The Supreme Court in the case of Agricas LLP held that when importers have taken such a chance there cannot be any bonafide belief on their part. The appellant was fully aware that they may have to face a dispute in regard to the notification.

“Ultimately, the appellant has not been able to justify the import, the Notification having been upheld by the Hon’ble Supreme Court. The goods were detained due to a violation on his part. The decisions relied on the learned counsel on this issue are not applicable to the facts of this case. In the present case, the Hon’ble Supreme Court has categorically held that there cannot be any bonafide belief when the importers have taken their chance to import the goods. In such circumstances, we do find that the appellant stands any favorable chance for the issue of a certificate of waiver of demurrage charges. This issue is found against the appellant,” the CESTAT ruled.

The tribunal modified the impugned order passed by the Commissioner (Appeals) to the limited extent of allowing the appellants to re-export the impugned goods on payment of redemption fine of Rs.2 crores. The imposition of a penalty of Rs. One crore is sustained.

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