2014 (1) TMI 1784 - AT - Customs

Amendment in IGM - imposition of redemption fine and penalty - initially the goods were consigned to M/s. DM Sons Metal Pvt. Ltd., who did not accepted the cargo therefore, the supplier sold the goods to the appellant M/s. Turakhia Ferromet Pvt. Ltd. - Held that - It is a case wherein the shipping line sought amendment in IGM only to change the name of the consignee and no other amendment regarding change in either the gross weight or the number of coils. In these circumstances, the observation of the learned Commissioner that it may be an effort to suppress the transaction value is not sustainable without producing any evidence on record that there may be variation in transaction value or there is contemporaneous import of such items wherein the value is higher - fine and penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Imposition of redemption fine on M/s. Turakhia Ferromet Pvt. Ltd.
2. Imposition of penalty on M/s. Mitusutor Shipping Agency Pvt. Ltd.
3. Validity of the impugned order under Section 112(a) read with Section 30 of the Customs Act, 1962.

Analysis:
1. The appellants contested the impugned order that imposed a redemption fine of Rs. 15,00,000 on M/s. Turakhia Ferromet Pvt. Ltd. The case revolved around an amendment sought by the shipping agency in the Import General Manifest (IGM) due to a change in consignee from M/s. DM Sons Metal Pvt. Ltd. to M/s. Turakhia Ferromet Pvt. Ltd. The Commissioner suspected an attempt to suppress the true transaction value, leading to the imposition of the redemption fine. However, the Tribunal found the Commissioner's conclusion unsupported by concrete evidence, as the amendment only involved a change in consignee name without affecting other crucial details like gross weight or number of coils. Therefore, the Tribunal deemed the imposition of the redemption fine unwarranted and set aside the impugned order in favor of M/s. Turakhia Ferromet Pvt. Ltd.

2. The second issue pertained to the imposition of a penalty of Rs. 3,00,000 on M/s. Mitusutor Shipping Agency Pvt. Ltd. in connection with the same case. The Tribunal noted that the penalty was imposed based on the same presumption that led to the redemption fine. However, since the Tribunal found the basis for the redemption fine to be unsubstantiated, it also overturned the penalty imposed on M/s. Mitusutor Shipping Agency Pvt. Ltd. The Tribunal emphasized the lack of concrete findings by the Commissioner to support the penalties, highlighting the absence of evidence indicating a variation in transaction value or contemporaneous higher-valued imports. Consequently, the penalty was deemed unjustified and set aside along with the redemption fine.

3. In assessing the validity of the impugned order under Section 112(a) read with Section 30 of the Customs Act, 1962, the Tribunal scrutinized the Commissioner's decision to impose the redemption fine and penalty. The Tribunal found the Commissioner's conclusions lacking in evidentiary support and reasoned that the penalties were imposed on a presumption basis without substantial grounds. By emphasizing the absence of concrete findings or evidence indicating any irregularities in the transaction value, the Tribunal concluded that the imposition of penalties was unjustified and unwarranted. Therefore, the impugned order was set aside, and the appeals were allowed with consequential relief, if applicable, in favor of the appellants.