2016 (11) TMI 1521 - AT - Customs

Quantum of redemption fine and penalty - Held that - Revenue s case is covered by Litigation Policy and is not maintainable - There is nothing to suggest that all the penalties, redemption fines involved in particular case would require to be clubbed for deciding the factor of total involved amount being more than ₹ 10 lakh. The Commissioner has given satisfactory reason for imposition of lower redemption fine and lower penalty by accepting the importers stand that they had infact ordered for furniture and their Chinese exporter has filled the container along with garments and undergarments by mistake - there are no merits to interfere in the impugned order of the Commissioner. Appeal dismissed - decided against Revenue.

Issues:
1. Lower fixation of redemption fine and penalties by the Commissioner.
2. Application of Litigation Policy of Government of India.
3. Imposition of redemption fine and penalties in two separate Bills of Entry.
4. Acceptance of importer's explanation for goods discrepancy.
5. Maintainability of Revenue's appeal.

Analysis:
1. The Revenue appealed against the Commissioner's order that confiscated goods and imposed redemption fines and penalties. The Revenue contended that the fines and penalties were lower than expected. The Tribunal found that the Commissioner had valid reasons for the lower fines and penalties, considering the importers' explanation that the goods discrepancy was due to the Chinese exporter mistakenly including garments and undergarments with furniture. The Commissioner also noted the importer's clean record as a regular importer with no past infringements. Therefore, the Tribunal upheld the Commissioner's decision on the fines and penalties, finding no merit in the Revenue's appeal on this issue.

2. The Tribunal addressed the application of the Litigation Policy of the Government of India, which states that cases involving amounts less than ?10 lakh should be adjudicated separately. The Commissioner had adjudicated two Bills of Entry in a single order, with each entry involving amounts less than ?10 lakh. The Tribunal emphasized that the Litigation Policy should be followed, and since the amounts for each entry were below the threshold, the Revenue's case was covered by the policy and thus not maintainable. The Tribunal clarified that the total effect of fines and penalties from both entries should not be combined to exceed the ?10 lakh limit.

3. The Tribunal highlighted that the Commissioner's decision to adjudicate both Bills of Entry in a single order did not warrant combining the fines and penalties from each entry to assess if they exceeded ?10 lakh. The Tribunal rejected the argument that the cumulative effect of fines and penalties should be considered, emphasizing that each entry should be evaluated separately based on the Litigation Policy criteria. The Tribunal concluded that the Revenue's appeal was not maintainable under the Litigation Policy guidelines.

4. The Tribunal acknowledged the importer's explanation for the goods discrepancy and the Commissioner's acceptance of the same. Given the importer's history as a regular importer without past infringements, the Tribunal found no grounds to interfere with the Commissioner's decision on the redemption fines and penalties. The Tribunal upheld the Commissioner's order based on the satisfactory reasons provided for the lower fines and penalties.

5. In conclusion, the Tribunal rejected the Revenue's appeal, citing the application of the Litigation Policy and the lack of merit in challenging the Commissioner's decision on the redemption fines and penalties. The Tribunal found that the Commissioner's order was reasonable and supported by valid reasons, including the importer's explanation and clean record, thus upholding the decision on both procedural and substantive grounds.

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