2014 (1) TMI 430 - AT - Customs

Waiver of pre-deposit - Imposition of penalty - Smuggling of Micro Brand SD Memory cards of 2GB concealed in the refrigerators - Confiscation of goods - Imposition of redemption fine - Held that - Assessee is an authorised unit under SEZ for trading activities and has been allowed to import goods for trading purpose and the said goods were used for concealing later on being cleared without proper declaration. The findings recorded by lower authorities, who came to the conclusion for imposing penalties as indicated herein above, needs to be gone into detail along with the law, which, in our view, can be done only at the time of final disposal of the appeals - appellants have not made out prima facie case for complete waiver of the amounts of penalties imposed - Partial stay granted.

Summary

Issues:
Stay petitions for waiver of pre-deposit of penalties; Imposition of penalties under Sections 112(a) and 114AA of the Customs Act, 1962; Involvement of various appellants in smuggling of memory cards; Disproportionate penalties and redemption fine; Appeal for waiver of pre-deposit based on financial difficulties; Role of different individuals in the smuggling activities; Directions for pre-deposit amounts and waiver of pre-deposit; Compliance and reporting deadlines; Miscellaneous application for direction to clear goods.

Analysis:
The judgment dealt with stay petitions filed by appellants seeking waiver of pre-deposit of penalties imposed under Sections 112(a) and 114AA of the Customs Act, 1962. The penalties were imposed due to smuggling of 28580 pieces of Micro Brand SD Memory cards of 2GB, with a value of Rs. 45,72,800. The adjudicating authority confiscated the goods and allowed release upon payment of a redemption fine. The appellants argued that the penalties were disproportionate and the redemption fine excessive, especially considering the depreciated value of the memory cards. Various individuals, including partners and employees of the appellants, claimed innocence and lack of involvement in the smuggling activities.

The senior counsel for some appellants contended that the penalties were unjustified, highlighting the SEZ status of one appellant engaged in trading activities. They argued that the goods were imported with collusion and without proper declaration. Other representatives argued against the penalties imposed on their respective clients, emphasizing their lack of direct involvement in the smuggling operations. The authorized representative for the Revenue maintained that the penalties were appropriate due to illegal importation and smuggling activities, refuting claims of disproportionate penalties.

After considering the submissions and records, the tribunal found the issue to revolve around improper importation of memory cards concealed in refrigerators. While acknowledging financial hardships faced by the appellants, the tribunal directed specific appellants to pre-deposit certain amounts for further proceedings. However, waiver of pre-deposit was granted to individuals whose roles in the smuggling were not clearly established. Compliance deadlines were set, and directions were issued for reporting and further orders based on compliance.

A miscellaneous application seeking direction to clear goods was dismissed as the adjudicating authority was bound to release goods upon compliance with the order-in-original conditions. The judgment concluded by setting deadlines for compliance, reporting, and further proceedings, with the stay of recovery pending appeal disposal. The detailed analysis considered the arguments, roles, and financial circumstances of the appellants, leading to specific directives on pre-deposit and waiver of pre-deposit based on individual circumstances.