2019 (9) TMI 1290 - AT - Customs

Quantum of redemption fine and penalty - Valuation of imported goods - Arecanuts - mis-declaration of value - Department was of the view that the goods do not conform to Food Safety and Standards Act of India FSSAI standards - HELD THAT - It has been submitted by learned counsel for the appellant that the appellant is willing to re-export the goods. Taking note of this fact, the redemption fine imposed cannot sustain. I take support from the decision of the Hon ble jurisdictional High Court in SANKAR PANDI VERSUS UNION OF INDIA 2001 (12) TMI 83 - MADRAS HIGH COURT , which has been upheld by the Hon ble Apex Court UNION OF INDIA VERSUS SANKAR PANDI 2010 (3) TMI 1247 - SC ORDER . Penalty - HELD THAT - It is seen that the appellant has suffered huge container charges and the goods have been detained for nearly nine months - Since the goods have been ordered to be re-exported and also taking note of the fact that they are not prohibited goods, the penalty imposed is on the higher side. The same is reduced to ₹ 25,000/-. The impugned order is modified to the extent of setting aside the redemption fine and upholding the direction to re-export the goods - The penalty is reduced to ₹ 25,000/- - Appeal allowed in part.

Summary

Issues:
1. Confiscation of goods for not conforming to FSSAI standards
2. Imposition of redemption fine and penalty
3. Challenge to redemption fine and penalty
4. Appellant's willingness to re-export the goods

The judgment pertains to an appeal filed regarding the confiscation of goods due to non-conformance with the Food Safety and Standards Act of India [FSSAI] standards. The original authority had ordered the confiscation of the goods, along with a redemption fine of ?20 lakhs and a penalty of ?10 lakhs. The Commissioner (Appeals) upheld the decision but reduced the redemption fine to ?5 lakhs and the penalty to ?2 lakhs. The appellant contested the redemption fine and penalty, expressing willingness to re-export the goods.

The appellant argued that since they are willing to re-export the goods, the redemption fine imposed lacked a basis. The appellant cited a decision by the jurisdictional High Court, supported by the Supreme Court, to strengthen their case. They also contended that the penalty was excessive, as there was no intent to violate any laws. On the other hand, the Revenue's Authorized Representative reiterated that the goods were imported in violation of FSSAI regulations, justifying the confiscation. The Representative argued that the redemption fine and penalty were appropriate, citing a relevant case law.

After hearing both sides, the judge noted the appellant's willingness to re-export the goods and found the redemption fine unjustifiable. Relying on the High Court and Supreme Court decisions cited by the appellant, the judge set aside the redemption fine. Regarding the penalty, considering the circumstances of the case where the goods were to be re-exported and were not prohibited, the judge deemed the penalty excessive and reduced it to ?25,000. Consequently, the impugned order was modified to eliminate the redemption fine, uphold the re-export direction, and reduce the penalty.

In conclusion, the judgment partially allowed the appeal by setting aside the redemption fine, upholding the re-export directive, and reducing the penalty to ?25,000. The decision was made based on the appellant's willingness to comply with re-exportation and the disproportionate nature of the original penalty imposed.