2004 (1) TMI 615 - AT - Customs

Summary

Issues:
- Imposition of redemption fine and penalty by the Commissioner of Customs
- Confiscation of goods due to over-valuation for export
- Review of the fine and penalty amounts by the Board
- Appeal for setting aside the fine and penalty and remanding the case for proper determination

Analysis:
1. The Commissioner of Customs imposed a redemption fine and penalty on the appellant after finding over-valuation of goods for export. The Commissioner confiscated the goods but allowed them to be taken back on payment of the redemption fine. The Adjudicating Commissioner held that the exporter attempted to fulfill export obligation by overvaluing the goods, contravening foreign trade rules. The Commissioner confiscated the goods under the Customs Act, 1962, due to contravention of export rules.

2. The Board reviewed the Commissioner's order and found the confiscation and penalty imposition just and legal. However, the Board considered the fine and penalty amounts to be low compared to the offense of over-valuation. The Board decided to set aside the fine and penalty amounts imposed by the Commissioner and remand the case for proper determination of the appropriate amounts.

3. The appellant's representative argued for setting aside the fine and penalty and remanding the case for proper imposition of amounts based on the gravity of the offense. Citing a legal decision, the representative emphasized the need for fines and penalties to be proportionate to the inflated value to deter fraudulent acts. The argument highlighted the importance of imposing appropriate fines to prevent revenue loss and fraudulent practices.

4. After considering the arguments and case law cited, the Tribunal found merit in the Department's position. The Tribunal concluded that the fine and penalty imposed by the Adjudicating Commissioner were inadequate given the declared value of the goods, seriousness of the offense, and extent of mis-declaration. As a result, the Tribunal set aside the order regarding the redemption fine and penalty amounts and remanded the case for the successor Commissioner to determine suitable fines and penalties. The respondents were granted a fair opportunity for a hearing before a new decision was made.

5. Ultimately, the Department's appeal was allowed by way of remand, indicating that the case would be reconsidered for the determination of appropriate redemption fine and penalty amounts in line with the gravity of the offense and the extent of mis-declaration.