2015 (4) TMI 953 - HC - Customs

Imposition of redemption fine - short-payment of customs duty on the imported goods on a value lesser than the actual one - whether redemption fine can be imposed without making a proper market survey to find out the market price, as prescribed under the provisions of Section 125 of the Act - Held that - It is the requirement of law that the amount of redemption fine should not exceed the market price of the goods confiscated and the same can be obtained only on market survey, which, in the instant case, has not been done - Single Judge has already remitted back the matter to the Settlement Commission in respect of imposition of penalty, we are of the considered view that the Settlement Officer, while re-considering the imposition of penalty, shall also examine the imposition of redemption fine, following due process of law, as observed by the Supreme Court in Commissioner of Customs, Mumbai vs. Mansi Impex 2011 (8) TMI 470 - Supreme Court of India in accordance with Section 125 of the Act. - Decided partly in favour of assessee.

Summary

Issues:
Challenge to order imposing redemption fine without proper market survey under Section 125 of the Customs Act, 1962.

Analysis:
The writ petitioner challenged the order dated 25.11.2014 passed in W.P. No.3056 of 2013, questioning the imposition of redemption fine without a proper market survey, as required by Section 125 of the Customs Act, 1962. The appellant argued that the redemption fine should not exceed the market price of the confiscated goods, citing the Supreme Court's ruling in Commissioner of Customs, Mumbai vs. Mansi Impex 2011 (270) ELT 631 (SC). The learned Single Judge's decision confirming the final order was deemed unjust and contrary to established legal principles.

On the contrary, the first respondent's counsel contended that a show cause notice was issued due to the illegal import of goods without a license. The appellant was liable for the full duty amount demanded under the notice. The Settlement Commission rightly imposed the redemption fine based on the circumstances. The Single Judge's decision was supported by the respondent, emphasizing the appellant's duty liability and the need for the redemption fine.

The Single Judge's ruling highlighted the need for a specific finding regarding the penalty imposed on the company and co-applicant, requiring reconsideration. The judgment partially allowed the writ petition, setting aside certain penalty-related findings for fresh consideration by the Settlement Commission. The case raised the question of whether a redemption fine can be imposed without conducting a proper market survey, as mandated by Section 125 of the Act.

Referring to the Supreme Court's decision in Mansi Impex, the Court reiterated that the redemption fine should not exceed the market price of the confiscated goods. The law requires a market survey to determine the appropriate redemption fine, a step not undertaken in the present case. The Court directed the Settlement Officer to re-examine the imposition of both penalty and redemption fine, ensuring compliance with Section 125 of the Act and the legal principles outlined in Mansi Impex.

In conclusion, the writ appeal was partly allowed, upholding certain aspects of the Single Judge's order while remanding the penalty and redemption fine issues to the Settlement Commission for further review. The Court emphasized the importance of following due process and legal requirements, as established by relevant legal precedents.