1997 (9) TMI 552 - AT - Customs

Summary

Issues:
1. Excessive redemption fine imposed by the Commissioner of Customs.
2. Imposition of a high penalty on the importer.
3. Lack of basis for determining redemption fine and penalty.
4. Comparison with earlier orders of the Commissioner and other Tribunal decisions.
5. Acceptance of earlier Commissioner's order by the Department.
6. Reduction of redemption fine and penalty by the Appellate Tribunal.

Analysis:

1. The appeal challenges the excessive redemption fine imposed by the Commissioner of Customs on used diesel engines imported by the appellant. The appellant argues that the fine, approximately 175% of the declared value, lacks a basis in market enquiry and is not substantiated by evidence. The Commissioner's emphasis on under-invoicing, without evidence, is also contested by the appellant.

2. The penalty imposed on the importer, amounting to Rs. 10 lakhs, is questioned as being unreasonably high. The appellant argues that the penalty, about 40% of the declared value, lacks a basis for such imposition. Comparisons with earlier Commissioner's orders and Tribunal decisions highlight the excessive nature of the penalty.

3. The lack of detailed reasoning or evidence in the Commissioner's order for determining the redemption fine and penalty is a significant issue. The appellant points out inconsistencies in the fine imposed compared to earlier orders and questions the Commissioner's methodology for arriving at the market price of the engines.

4. Reference to earlier orders of the Commissioner and decisions by the Tribunal is made to support the appellant's argument for a lower redemption fine and penalty. The appellant highlights the range of fines and penalties in similar cases to demonstrate the excessive nature of the current imposition.

5. The Department's acceptance of an earlier order by the Commissioner, as legal and proper, raises questions about the consistency in determining fines and penalties. The acceptance implies that the margin of profit determined in the earlier order should also apply to the current case, leading to a reduction in the fine.

6. The Appellate Tribunal, considering the arguments and lack of substantiation in the Commissioner's order, reduces the redemption fine from Rs. 40 lakhs to Rs. 24 lakhs. The penalty imposed is also reduced from Rs. 10 lakhs to Rs. 2.5 lakhs, considering the absence of misdeclaration and the comparable declared value of the engines. The Tribunal's decision aims to rectify the excessive fines and penalties imposed by the Commissioner.