2002 (4) TMI 436 - AT - Customs

Redemption fine vis-a-vis re-export of confiscated goods - Confiscation of goods, redemption fine and penalty - Penalty

Summary

Issues Involved:
1. Confiscation of imported goods.
2. Imposition of redemption fine and personal penalties.
3. Legality of re-exporting confiscated goods without redemption fine.
4. Proof of misdeclaration and intent to conceal.

Issue-wise Detailed Analysis:

1. Confiscation of Imported Goods:
The Commissioner of Customs, Calcutta, ordered the confiscation of imported goods, comprising 21.5 MTs of Lithopone and 10 MTs of Tetracycline HCL, under Sections 111(d) and 111(m) of the Customs Act, 1962. The goods were found to be misdeclared as Lithopone, with Tetracycline being a restricted item requiring a specific import license. The Commissioner concluded that the goods were liable for confiscation due to misdeclaration and concealment.

2. Imposition of Redemption Fine and Personal Penalties:
The Commissioner imposed a redemption fine of Rs. 30 lakhs on the appellant firm and personal penalties of Rs. 5 lakhs on the firm and Rs. 1 lakh on its proprietor under Section 112(a) and 112(b) of the Customs Act, 1962. The appellant argued that the import was a result of a wrong shipment by their foreign supplier and that they had no connection with the alleged Belgian importer. The Commissioner, however, rejected this explanation, citing overseas investigations that revealed the Belgian address to be fake and concluded that there was a deliberate attempt to import Tetracycline clandestinely.

3. Legality of Re-exporting Confiscated Goods Without Redemption Fine:
The appellant contended that once re-export of the goods was allowed, the imposition of redemption fine was not justified, citing several precedents. The Tribunal, in its majority opinion, held that the Commissioner's order did not explicitly permit re-export but merely clarified that the importer could dispose of the redeemed goods either for home consumption or export. The Tribunal emphasized that the Commissioner had correctly concluded that the goods were liable for confiscation and that the imposition of redemption fine and penalties was justified.

4. Proof of Misdeclaration and Intent to Conceal:
The Tribunal agreed with the Commissioner's findings that the goods were misdeclared and that there was a clear intention to conceal Tetracycline within the consignment of Lithopone. The method of packing and the presence of chits indicating Tetracycline in some bags supported this conclusion. The Tribunal upheld the Commissioner's rejection of the appellant's claim of a shipping error and affirmed the finding of misdeclaration and mala fide intent.

Separate Judgments:
- Member (Judicial): Held that no redemption fine is imposable when re-export of goods is allowed, and thus, set aside the redemption fine and penalties imposed by the Commissioner.
- Member (Technical): Concluded that the Commissioner's order did not grant permission for re-export and upheld the imposition of redemption fine and penalties, rejecting the appeal.
- President (Majority Opinion): Agreed with the Member (Technical) that the appeal should be rejected, affirming the confiscation, redemption fine, and penalties, except for the personal penalty on the proprietor, which was vacated.

Final Order:
In view of the majority opinion, the appeals were rejected, upholding the confiscation, redemption fine, and penalties imposed by the Commissioner of Customs, Calcutta.