2015 (11) TMI 136 - SC - Customs

EPCG benefit - Confiscation of goods - reduction in redemption fine - violation of Section 45 of the Customs Act - goods were shifted without payment of duty and without authorization of the proper officer - Held that - there is a clear violation of the provisions of Section 45 of the Customs Act. In such circumstances, when the confiscation was held to be valid, we are of the view that reducing the redemption fine from ₹ 1.2 crores to merely ₹ 1 lac was not proper. We have considered this aspect. According to us the interest of justice would be subserved in fixing the redemption fine to the extent of 50% of the fine imposed by the Commissioner. Other directions contained in the order of the Tribunal are maintained. - Appeal disposed of.

Summary

Issues:
1. Import of Crude Distillation Unit Column (CDU) and Vacuum Distillation Unit Column Vessels (VDU) without paying customs duty.
2. Confiscation of goods, levy of duty, penalty, and denial of EPCG benefit.
3. Reduction of redemption fine and setting aside of penalty by the Tribunal.
4. Appeal against the Tribunal's order regarding reduction of redemption fine.

Analysis:
1. The respondent imported CDU and VDU for an oil refinery project without paying customs duty. The goods were shifted to the project site without authorization, leading to a show cause notice for confiscation and penalty.

2. The Commissioner ordered confiscation, imposed import duty, redemption fine, and penalties on the Custodian and importer. EPCG benefit was also denied. The Tribunal upheld the confiscation but reduced the redemption fine and set aside the penalty based on the circumstances.

3. The Tribunal's order confirmed the violation of Customs Act Section 45 due to unauthorized shifting of goods without duty payment. While upholding the confiscation, the Tribunal reduced the redemption fine, accepted the EPCG license, and set aside penalties exceeding the duty amount.

4. The Supreme Court reviewed the Tribunal's decision and found the reduction of redemption fine from Rs. 1.2 crores to Rs. 1 lac inadequate. The Court considered fixing the redemption fine at 50% of the Commissioner's imposed fine as just. Other directions of the Tribunal were maintained, and the respondent was ordered to pay the revised redemption fine within four weeks.

This judgment highlights the consequences of importing goods without paying customs duty, the authority's power to confiscate, levy penalties, and the appellate process for challenging such decisions. The Supreme Court's intervention aimed to ensure a fair balance between penalty imposition and justice, emphasizing compliance with customs regulations and duties.