2018 (12) TMI 1848 - AT - Customs

Confiscation of goods on the second charge of misdeclaration of value - reduction in redemption fine and penalty - non-possession of a valid licence - Department could not bring any evidence which showed that the value declared in the subject bills of entry were misdeclared - HELD THAT - Commissioner (Appeals) has held that the redemption fine has been imposed on higher side. The imported goods were old and used garments and no proper market enquiry was conducted to ascertain the actual margin of profit (MOP), beside this, approximately 25% value was extra loaded without any reasonable justification and same was accepted by the importer who also incurred demurrage for more than one month. In these circumstances the redemption fine should have been of the lower amount. There is no miss-declaration of value and goods are not liable for confiscation under Section 111 (m) of the Act and appellant had accepted the enhanced value and duty was paid in excess on enhanced assessable value from declared value to USS 1.316 (when they only agreed up to USD 1.10) and the importer had paid the extra duty - The quantum of redemption fine and penalty also reduced. There are no infirmity with the impugned order and the same is hereby sustained - appeal of Revenue dismissed.

Summary

Issues:
1. Appeal against reduction of fine and penalty by Commissioner (Appeals)
2. Confiscation of goods under Customs Act, 1962
3. Imposition of penalty under Section 111(d) of the Act
4. Justification for penalty imposition
5. Reduction of personal penalty to 5% of CIF assessed value
6. Applicability of case laws in imposing redemption fine and penalty

Analysis:
1. The appeal was filed by Revenue against the order of the Commissioner (Appeals) which reduced the fine and penalty. The Commissioner held that the goods could not be confiscated under Section 111(m) of the Customs Act, 1962, as no evidence was presented to prove misdeclaration of value. The only offense left was non-possession of a valid license under Section 111(d) of the Act. The Revenue sought to set aside the Order-in-Appeal and reinstate the assessment made by the Deputy Commissioner of Customs.

2. The Commissioner (Appeals) confirmed the enhanced assessed value but set aside the confiscation under Section 111(m) of the Act. However, the confiscation under Section 111(d) of the Act was upheld. The Commissioner justified the imposition of penalty under Section 111(d) as the goods were liable for confiscation. The Commissioner emphasized that the penalty should be commensurate with the offense and reduced the personal penalty to 5% of the CIF assessed value under Section 112(a) of the Act.

3. In determining the penalty, the Commissioner referred to the case law and emphasized that the penalty should not be imposed arbitrarily but based on reason and justice. The Commissioner reduced the penalty from 11% to 5% considering the circumstances of the case and the role of the importer. The Commissioner cited previous judgments to support the decision to reduce the redemption fine to 10% and the penalty to 5% of the assessed value.

4. The Commissioner concluded that the impugned order did not have any infirmity and upheld the decision to reduce the fine and penalty. Consequently, the appeal filed by the Revenue was dismissed, and the impugned order was sustained.

This detailed analysis covers the issues raised in the judgment and provides a comprehensive understanding of the decision rendered by the Appellate Tribunal CESTAT KOLKATA.