2007 (4) TMI 495 - AT - Customs

Summary

Issues Involved:
1. Violation of Foreign Trade Policy.
2. Misdeclaration of value of goods.
3. Quantum of redemption fine and penalty.

Summary:

1. Violation of Foreign Trade Policy:
The respondents imported old/used photocopiers under OGL, which was clarified by the Ministry of Commerce to require a specific license. The department found these imports in violation of para 2.17 of the Foreign Trade Policy (2004-09) as amended by Notification No. 31/2005, dated 19-10-2005. The adjudicating authority ordered confiscation of the goods u/s 111(d) of the Customs Act read with Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992.

2. Misdeclaration of Value of Goods:
The department, after 100% examination and appraisal by Chartered Engineers, found that the importers had misdeclared the value of the goods in their respective bills of entry. The adjudicating authority determined the value of the goods under Rule 8 of the Customs Valuation Rules, 1988, and enhanced the value for assessment to duty.

3. Quantum of Redemption Fine and Penalty:
The Revenue's grievance was that the quanta of redemption fine and penalty imposed by the Commissioner were not deterrent enough. The Commissioner had not ascertained the market price or margin of profit for determining the redemption fine u/s 125 of the Customs Act. The Tribunal noted that the only dispute was regarding the quanta of fine and penalty. The Commissioner imposed fines and penalties as follows:

- Cann Photocopiers (I) P. Ltd.: Enhanced value: Rs. 21,96,703; Redemption fine: Rs. 3,25,000; Penalty: Rs. 1,00,000.
- Sri Sabare Enterprises: Enhanced value: Rs. 31,56,839; Redemption fine: No change; Penalty: Rs. 1,50,000.
- T.T.C. Services: Enhanced value: Rs. 23,74,299; Redemption fine: Rs. 3,50,000; Penalty: Rs. 1,00,000.
- Vijex & Vijex: Enhanced value: Rs. 22,53,570; Redemption fine: Rs. 3,30,000; Penalty: Rs. 1,00,000.
- Omex International: Enhanced value: Rs. 25,56,085; Redemption fine: Rs. 3,80,000; Penalty: Rs. 1,25,000.
- A.I.R. Overseas: Enhanced value: Rs. 20,82,416; Redemption fine: Rs. 3,00,000; Penalty: Rs. 1,00,000.

The Tribunal decided to enhance the fines and penalties to align with the benchmark set in similar cases, ensuring they were commensurate with the offences committed. The appeals were allowed to the extent of modifying the quanta of redemption fine and penalty.

Conclusion:
The impugned orders were modified accordingly, and the appeals were allowed to the extent of enhancing the fines and penalties. The operative portion of the order was pronounced in open Court on 19-4-2007.