2006 (11) TMI 65 - AT - Customs

Penalty and Redemption fine Appellant is an EOU and imported raw material and sale in the domestic market Appellant can t fulfill the export obligation, so he liable for penalty and redemption fine on the seized goods

Summary

Issues:
- Duty liability on imported raw materials
- Confiscation and penalty imposition
- Appeal against penalty and redemption fine
- Ownership and confiscation of the tempo
- Penalty imposition on employees and purchasers
- Awareness of consignee regarding non-duty paid goods

Analysis:

1. Duty Liability on Imported Raw Materials:
The appellant, an EOU, imported raw materials without paying customs duty, which were meant for export production. However, a portion of the imported yarn was sold domestically. The Customs authorities confiscated the consignment during transportation and imposed penalties on the appellant.

2. Confiscation and Penalty Imposition:
In the adjudication proceedings, the confiscated goods were ordered to be redeemed on payment of a fine. Penalties were imposed on the appellant, two employees, and the purchasers of the yarn. The initial orders were upheld in the first appeal, leading to the present appeals challenging the penalties and confiscation.

3. Appeal Against Penalty and Redemption Fine:
The appellant argued that duty liability was discharged before the issuance of a corrigendum to the show cause notice, citing a precedent. The Tribunal reduced the penalty to 50% of the duty liability based on the timing of duty payment. However, no relief was granted regarding the redemption fine, deemed not excessive.

4. Ownership and Confiscation of the Tempo:
Regarding the tempo used for transport, it was contended that the appellant had no standing as the tempo belonged to another individual who had the opportunity to redeem it. The confiscation order regarding the tempo was final as the owner did not appeal, and the appellant had no locus standi to challenge it.

5. Penalty Imposition on Employees and Purchasers:
The employees of the appellant, who were carrying out instructions, were found not individually responsible for the duty evasion. Therefore, no penalty was justified on them, and their appeals were allowed. Similarly, the consignee of the confiscated goods was not aware of the duty evasion, leading to the allowance of their appeal.

6. Awareness of Consignee Regarding Non-Duty Paid Goods:
The consignee, M/s. Navpad Textile Industries, was considered not aware of the nature of the goods being non-duty paid. As a result, no penalty was imposed on them, and their appeal was allowed.

In conclusion, the Tribunal upheld the penalty on the appellant but reduced it to 50% of the duty liability. The appeals of the employees and consignee were allowed, as they were not deemed individually responsible or aware of the duty evasion. The ownership issue of the tempo was clarified, stating that the appellant had no standing to challenge its confiscation.