2017 (11) TMI 1795 - AT - Customs

Confiscation of warehoused goods - redemption fine - penalty - expiry of warehousing period, which is not extended - Held that - In violation of the warehousing bond executed by them, the appellant has failed to clear the goods even after expiry of the warehousing period. Such goods are to be deemed as improperly removed in terms of Section 72(1)(b) of the Act. Consequently, the goods are liable to be confiscated under Section 111(d) of the Act - Confiscation upheld - quantum of redemption fine and penalty reduced - appeal allowed in part.

Summary

Issues:
Violation of warehousing bond leading to confiscation of goods, applicability of Sections 111(d), (j), and (o) of the Customs Act, justification of redemption fine and penalty.

Analysis:
The appellant imported goods and stored them in a public bonded warehouse under Section 60 of the Customs Act, 1962. Upon expiry of the warehousing period, the goods were not cleared, and no extension was requested. The adjudicating authority ordered confiscation of the goods, redemption fine of ?56,79,548, and penalty of ?5 lakhs. The Commissioner (Appeals) upheld the order, leading to the present appeal.

The appellant argued that confiscation under Sections 111(d), (j), and (o) was not justified for delay in clearance, advocating liability limited to Customs duty and interest. Case laws were cited in support. On the other hand, the Revenue contended that the goods were improperly removed as per Section 72(1)(b) of the Act due to violation of the warehousing bond terms.

After hearing both parties and examining the records, it was found that the goods were not cleared in violation of the bond, leading to confiscation under Section 111(d) of the Act. However, considering the circumstances, the redemption fine and penalty were deemed excessive. Thus, the redemption fine was reduced to ?4 lakhs, and the penalty to ?2 lakhs, while the appellant was directed to pay the Customs duty with interest as per the lower authorities' orders.

In conclusion, the appeal was partially allowed, modifying the impugned order to reduce the redemption fine and penalty. The judgment was pronounced on 17-11-2017 by Member (T) V. Padmanabhan.