2009 (6) TMI 840 - AT - Customs

Penalty and redemption fine - Misdeclaration - imported second-hand used photocopiers - Held that - the ld. Commissioner (Appeals) has come to a conclusion that the imposition of fine and penalty would depend on the nature of the offence and recurrence of the same. In other words, he is holding that the appellants are habitual offenders and hence he has reduced the redemption fine to 35% while upholding the entire amount of penalty. To my mind this approach is not in consonance with the settled law, as original adjudicating authority has not come to such conclusion. At the first appeal stage, this cannot be considered as a reason for imposition of fine and penalty if the appellant is not put to notice. The appellants are required to pay redemption fine of 10% and penalty of 5% of the value of goods as arrived by the adjudicating authority - appeal dismissed - decided against appellant.

Summary

Issues:
- Dispute over valuation of imported second-hand photocopiers
- Confiscation of goods under Customs Act
- Imposition of redemption fine and penalties
- Appeal against reduction of fine by Commissioner (Appeals)

Analysis:
1. The appeals involved a dispute regarding the valuation of second-hand photocopiers imported by the appellants, leading to confiscation of goods under the Customs Act. The Revenue contested the valuation, prompting the use of an independent Chartered Engineer to assess the goods based on factors like year of make and physical condition. The appellants accepted the valuation and paid the duty. However, misdeclaration of the goods led to confiscation under Sections 111(d) and 111(m) of the Customs Act, with an option for redemption by paying a fine and imposition of penalties under Section 112(a).

2. The appellants appealed to the Commissioner (Appeals) challenging the fine imposed, which was reduced to 35% of the value by the Commissioner. The appellants argued that this reduction was against established legal precedents set by the Tribunal and High Courts in similar cases. The Commissioner upheld the confiscation and penalties, citing violations of the Foreign Trade Policy and misdeclaration of goods by the appellants.

3. The Tribunal considered arguments from both sides and reviewed the records. It noted that the Commissioner's decision to reduce the fine to 35% was based on the nature of the offense and recurrence, implying habitual offenses by the appellants. However, the Tribunal found this approach inconsistent with the original adjudicating authority's findings and beyond the scope of the initial order. The Tribunal referenced previous cases where a benchmark of 10% redemption fine and 5% penalty on the value of imported goods was established by the Tribunal and upheld by High Courts.

4. Consequently, the Tribunal modified the orders, requiring the appellants to pay a redemption fine of 10% and a penalty of 5% of the value of the goods as determined by the adjudicating authority. The appeals were disposed of accordingly, providing consequential relief if applicable.