2019 (5) TMI 1739 - AT - Customs

Classification of imported goods - consignment of Old white and Coloured Cut Wiper Industrial Rags - whether classified under ITC (HS) Heading No. 6310 10 90? - restricted for import or not - HELD THAT - The words fine and penalty are often interchangeably used in common parlance. Further, due to clerical error in reflecting the amount of penalty in the column of fine in the appeal memo, cannot put the appellant in a more disadvantageous position, than he was in. Further, the power of enhancement of any fine, penalty, etc., is vested in the Commissioner (Appeals) only. This Tribunal does not have the power to increase the amount of fine, penalty, etc., in appeal filed by the assessee/importer. Thus by virtue of the order of this Tribunal reducing both the quantum of fine and penalty, the appellant cannot be put to more disadvantageous position as they have already re-exported the goods, on the date of the final order. The appellant is entitled to refund of ₹ 1,00,000/- being the excess penalty paid, as the amount of penalty is reduced by this Tribunal - Accordingly the adjudicating authority is directed to grant the refund of ₹ 1,00,000/- with interest as per rules - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Classification of imported goods under ITC (HS) Heading No. 6310 10 90.
2. Confiscation of goods under Section 111(d) of the Customs Act, 1962.
3. Imposition and reduction of redemption fine and penalty.
4. Refund claim for excess penalty paid.
5. Interpretation of clerical error in reflecting penalty in the appeal memo.
6. Power of enhancement of fine and penalty by the Commissioner (Appeals).
7. Entitlement to refund of excess penalty paid.

Classification of Imported Goods:
The appellant imported "Old white and Coloured Cut Wiper Industrial Rags" in March 2011, classified under ITC (HS) Heading No. 6310 10 90. The Department objected, deeming the goods "Restricted" for import, resulting in confiscation under Section 111(d) of the Customs Act, 1962.

Imposition and Reduction of Redemption Fine and Penalty:
Initially, the appellant was given two options: to pay a redemption fine of ?4,00,000 plus a personal penalty of ?1,50,000 or to re-export the goods on payment of a penalty of ?1,50,000. Following appeals and orders, the Tribunal modified the redemption fine to ?2,00,000 and the penalty to ?50,000.

Refund Claim for Excess Penalty Paid:
After depositing ?1,50,000 penalty and re-exporting the goods, the appellant sought a refund of the excess penalty paid. The claim was rejected, stating the appellant must pay the balance amount of ?1,00,000, leading to further appeals.

Interpretation of Clerical Error and Power of Enhancement:
The appellant's appeal memo reflected the penalty amount in the fine column, leading to a dispute. The Tribunal clarified that clerical errors should not disadvantage the appellant and emphasized that only the Commissioner (Appeals) can enhance fines or penalties.

Entitlement to Refund of Excess Penalty Paid:
The Tribunal held that the appellant, having already re-exported the goods, should be refunded the excess penalty of ?1,00,000 due to the reduction in penalty amount by the Tribunal. The adjudicating authority was directed to grant the refund with interest.

In conclusion, the Tribunal allowed the appeal, emphasizing the appellant's entitlement to the refund and clarifying the distinction between fine and penalty, ensuring the appellant was not unfairly disadvantaged due to clerical errors.