2005 (5) TMI 574 - AT - Customs

Penalty - Misdeclaration under bona fide belief - Confiscation and redemption fine - Misdeclaration

Summary

Issues:
1. Imposition of fine and penalty for misdeclaration of goods in violation of Exim Policy.
2. Contention of bona fide belief and absence of mens rea in contravening the law.
3. Justification of penalty, confiscation, and redemption fine based on previous Tribunal rulings.

Analysis:

1. The appeal challenged the imposition of a fine of Rs. 3.5 lakhs and a penalty of Rs. 1.75 lakhs due to misdeclaration of goods in the bill of entry, which were used in parts of computers imported in violation of para 217 of Exim Policy. The appellant did not contest the misdeclaration but argued that there was no mala fide intention in contravening the law, claiming a bona fide belief and absence of mens rea in evading duty. The learned Counsel cited the case of Meirs Pharma (India) Pvt. Ltd. and argued for a penalty reduction based on Tribunal rulings regarding the import of old second-hand machineries without a license for bona fide use.

2. The original authority cleared the importer of mala fide intention to evade duty, acknowledging the benefit of bona fide belief. Consequently, the imposition of the penalty was deemed unjustified, following the precedent set in the case of CCE v. Umang Computers. The order of confiscation and fine was upheld due to a clear violation of the Exim policy. However, following the principles established in the case of Big Apple Computer, the Redemption Fine was reduced to 10% of the value, amounting to Rs. 1.25 lakhs in this instance where the value of the property was Rs. 12.5 lakhs. The impugned order was modified accordingly, disposing of the appeal in the specified terms.