2013 (10) TMI 181 - AT - Customs

Discretionary Power - Confiscation of Goods Penalty u/s 112 of Customs Act - The adjudicating authority had used his discretionary power to come to reasoned conclusion not to confiscate the goods, relying upon the judgment of the KESORAM RAYON Versus COLLECTOR OF CUSTOMS, CALCUTTA 1996 (8) TMI 109 - SUPREME COURT OF INDIA - the confiscation of the goods was a discretionary power and which had been invoked by the adjudicating authority cannot be called in question in the facts and circumstances of this case - Since there was no confiscation order of the capital goods, non-imposition of penalty under Section 112 of Customs Act 1962 also seems to be correct - the order was correct, legal and does not suffer from any infirmity. The goods become liable for confiscation under Section 111(o) of the Customs Act, 1962 for violation of the provisions of Notification No.140/91 Cus (Now Notification No.52/2003 Cus.) read with the provisions of Section 61 of the Customs Act, 1962 - Taking into consideration the fact of payment of full duty together with interest - a lenient view to be taken as regards confiscation of the impugned goods and also regarding imposition of penalty - Decided against Revenue.

Summary

Issues:
Revenue's appeal against Order-in-Original No.18/2006 dated 25.4.2006 - Confiscation of goods, imposition of fine, penalty under Section 112(a) of the Customs Act, 1962.

Analysis:
The appeal filed by the Revenue pertains to the confiscation of certain capital goods that became obsolete and were no longer used for software development, along with expired bonded goods. The duty liability on these goods amounted to Rs.27,36,259/- with interest of Rs.1,01,671/-. The assessee voluntarily paid the duty and interest after the omission was pointed out. The adjudicating authority confirmed the duty liability and appropriated the amounts already paid, not confiscating the goods or imposing fines or penalties. The Revenue contended that the goods should have been confiscated, and penalties should have been imposed under Section 112(a) of the Customs Act, 1962.

The Revenue argued that the non-confiscation of goods and the absence of penalty imposition were erroneous, citing non-compliance with Notification No.52/2003 and asserting that the duty payment was not voluntary. The Revenue maintained that penalty should have been imposed despite the duty payment before the show-cause notice. The respondent's counsel reiterated the adjudicating authority's findings.

Upon reviewing the submissions and records, it was established that the goods had indeed become obsolete and the warehousing period had lapsed, leading to duty liability and interest. The adjudicating authority's decision not to confiscate the goods or impose penalties was based on the importer's voluntary duty payment and the discretionary power invoked. The authority referenced the Hon'ble Supreme Court's judgment and deemed the confiscation of goods as discretionary. Consequently, the order was deemed legal and correct, with no identifiable flaws.

The appellate tribunal upheld the impugned order, concluding that the Revenue's appeal lacked merit and was therefore rejected. The decision was announced in open court upon the conclusion of the hearing.