2012 (10) TMI 584 - AT - Customs

Penalty - Prohibition on import of second hand goods Held that - Initially Tribunal had reduced fine and penalties to the range of 15% and 5% of the assessable value. From the repeated imports made by the importer it is quite clear that the fine and penalties imposed are not wiping out the profit margin, probably because the wrong value declared also. Considering the repeated nature of the offence there is need to increase this fine and penalty. But still there is no justification for increasing the penalty to about 62% and 25% of the assessable value approved - penalty reduced - appeal is allowed partially.

Summary

Issues:
Classification of imported goods, valuation of goods, confiscation of goods, imposition of redemption fine, imposition of penalty.

Classification of Imported Goods:
The appellants imported old and used parts of photocopiers and declared them under Customs Tariff Item 90099900. However, the Revenue argued that the goods should be classified under Tariff Item 90091200, which attracted higher duty rates. The adjudicating authority held that the goods were restricted for import as per the Foreign Trade Policy and should be confiscated under Section 111(d) of the Customs Act.

Valuation of Goods:
The declared value of the goods was challenged by the Customs Officers who had a Chartered Engineer assess the value at $210, higher than the declared value of $150. The adjudicating authority accepted the assessed value and valued the goods at Rs. 5,63,482/-.

Confiscation of Goods, Redemption Fine, and Penalty:
The adjudicating authority confiscated the goods under Section 111(d) of the Customs Act, imposed a redemption fine of Rs. 2,50,000/-, and a penalty of Rs. 1,00,000/- on the appellant. The Commissioner (Appeal) upheld the confiscation and redemption fine but questioned the basis for the value assessed by the Chartered Engineer. The appellant challenged the imposition of penalty and fine, arguing that they were excessive.

Reduction of Fine and Penalty:
The Tribunal noted that the appellant had a history of importing similar goods and had filed multiple appeals. While recognizing the need to increase the fine and penalty due to repeated offenses, the Tribunal found the imposed amounts excessive. As a result, the fine and penalty were reduced to Rs. 1,25,000/- and Rs. 50,000/- respectively.

In conclusion, the appeal was allowed partially, with the Tribunal reducing the fine and penalty amounts. The judgment highlighted the importance of correct classification, valuation, and the consequences of importing restricted goods without the necessary licenses.