2011 (2) TMI 626 - AT - Customs

Fine in lieu of confiscation and penalty - Confiscation of defective steel plates and order for redeeming the same on payment of fine in lieu of confiscation of Rs.2.5 lakhs - he only offence involved in this case is the mis-declaration of the goods and importation through a wrong port and there is no mis-declaration of value or quantity etc. and also the fact that the redemption fine has been fixed without any application of logic or reasoning, some reduction in the redemption fine and penalty is warranted - In the absence of any specific survey or details, 10% profit margin can be assumed and therefore to wipe out the same thing, redemption fine of Rs.1 lakh would be appropriate - Having regard to the fact that total value of the goods is around Rs.9 lakhs, penalty of about Rs.50,000/- would meet the ends of the justice - Appeal is rejected but fine in lieu of confiscation is reduced to Rs.1 lakh and penalty on the appellant is reduced to Rs.50,000/-

Summary

Issues: Mis-declaration of goods, importation through wrong port, confiscation, redemption fine, penalty

Mis-declaration of Goods:
The case involved the importation of steel plates declared as prime quality but found to be seconds and defective, except for one plate. The appellant argued that they had contracted for prime quality plates and paid a higher price, claiming they were cheated. The appellant did not seek clarification from the supplier or take action against them, citing their status as a small trader. The department contended that the goods were not permitted to be imported through Mundra Port as seconds and defective items. The Tribunal considered the appellant's responsibility, citing a previous case where discrepancies were referred to the overseas supplier for clarification, unlike in this case. The Tribunal acknowledged the mis-declaration but reduced the redemption fine and penalty due to lack of evidence of intentional misrepresentation.

Importation Through Wrong Port:
The importation of seconds and defective plates through Mundra Port was a violation of the import licensing note, which permitted such items only through specific sea ports. The appellant admitted to this violation but argued that their intention was to import prime quality plates. The department emphasized the breach of the licensing note, highlighting that no protest or clarification was made by the appellant regarding the discrepancy in goods. The Tribunal recognized the breach but considered the lack of evidence of deliberate misrepresentation, leading to a reduction in the penalty imposed.

Confiscation, Redemption Fine, Penalty:
The goods were confiscated, and a redemption fine of Rs.2.5 lakhs was imposed, along with a penalty. The appellant challenged the redemption fine, claiming it was arbitrarily fixed without considering market factors or profit margins. The Tribunal agreed that the redemption fine lacked logical reasoning and reduced it to Rs.1 lakh, considering a presumed profit margin of 10%. Similarly, the penalty was reduced to Rs.50,000 to align with the value of the goods and ensure justice was served. Despite rejecting the appeal, the Tribunal mitigated the financial penalties due to the specific nature of the offense and the lack of evidence of intentional wrongdoing.

This detailed analysis of the legal judgment from the Appellate Tribunal CESTAT, Ahmedabad covers the issues of mis-declaration of goods, importation through the wrong port, confiscation, redemption fine, and penalty, providing a comprehensive overview of the case and the Tribunal's decision-making process.