2014 (5) TMI 242 - AT - Customs

Reduction of Redemption Fine & Penalty - Intention of Mis-declaration - Confiscation of imported computer parts viz. RAMs, Microprocessors and Hard Disk Drives Variation in the quantity Sections 111(l) & 111(m) and 112(a) of the Customs Act - Held That - Original adjudicating authority himself admits that there was no intention of deliberate mis-declaration - There is no challenge or verification of the claim made by appellant that mistake happened at the end of the supplier - No verification was made with another customer to whom the goods were meant and as to whether there was deliberate mis-declaration or not - No doubt in terms of Section 112 rendering the goods liable to confiscation is sufficient - Nevertheless, the importer claimed that it was a mistake and it happened because of the supplier and another customer which has not been gone into and considered at all - Accordingly, the penalty imposed on the appellant is reduced to Rs. 10,000/- (Rupees Ten thousand only). Once the goods are liable for confiscation, the redemption fine could be upto the market value - Even though learned counsel submits that profit margin should be taken into account, statutorily the same is not required - In the absence of verification and having considered the fact that goods were lying more than 2 months from the date of import and that importer cannot be held entirely responsible for the mis-declaration the redemption fine is required to be reduced - Accordingly, the redemption fine is reduced to Rs. 50,000/- (Rupees Fifty thousand only) to meet the ends of justice Decided partly in favour of assessee.

Summary

Issues: Mis-declaration of value and description, confiscation of goods, imposition of penalty, reduction of redemption fine

Mis-declaration of value and description:
The case involved an appellant who imported computer parts and faced discrepancies in the declared quantity, leading to suspicions of mis-declaration. The original adjudicating authority held that there was mis-declaration of value and description, making the goods liable for confiscation under specific sections of the Customs Act, 1962. The appellant accepted the value determined by the Revenue based on a Chartered Engineer's opinion, leading to adjudication proceedings.

Confiscation of goods and imposition of penalty:
The adjudicating authority confiscated the goods but allowed the importer to redeem them upon payment of a fine and imposed a penalty. The Commissioner (Appeals) later reduced the redemption fine and penalty on appeal filed by the appellant. The appellant argued that there was no deliberate mis-declaration, attributing the mistake to the supplier sending excess goods meant for another customer. The appellant contended that the penalty and redemption fine should be waived or substantially reduced due to the circumstances.

Reduction of redemption fine:
The learned counsel argued that the penalty and redemption fine were unjustified as there was no deliberate mis-declaration, and the mistake was attributed to the supplier. The Appellate Tribunal noted that there was no intention of deliberate mis-declaration and that the penalty should be reduced accordingly. The Tribunal considered the lack of verification regarding the supplier's mistake and the involvement of another customer. The penalty imposed on the appellant was reduced significantly to Rs. 10,000, and the redemption fine was also reduced to Rs. 50,000 to align with the facts and circumstances of the case.

The judgment highlighted the importance of verifying claims and circumstances surrounding alleged mis-declarations before imposing penalties and fines. It emphasized the need for a thorough examination of the facts and involvement of relevant parties to ensure fair adjudication in customs cases.