2008 (7) TMI 271 - AT - Customs

Quantum of redemption fine illegal import of wrist watches - redemption fine of Rs. 4 lakhs for value of goods of Rs. 8,76,648/- seems to be excessive - demurrage charges and container charges are being incurred by the importer, as such, in order to meet the ends of justice redemption fine is reduced to Rs. 1.00 Lakh importer has been paid an amount of Rs. 2 lac for illegal import of previous consignment also, so penalty on him is reduced penalty on CHA is warranted, but reduced

Summary

Issues:
- Stay applications against penalties and redemption fine under Customs Act, 1962.
- Confiscation of consignment involving concealment of wrist watches in toothbrushes, diapers, and plastic bowls.
- Enhancement of value, penalties, and redemption fine imposed on the appellants.
- Allegations of smuggling by the Custom House Agent (CHA) and the importer acting in collusion.
- Reduction of redemption fine and penalties imposed by the adjudicating authority.

Analysis:
1. Stay Applications Against Penalties and Redemption Fine:
The case involved two stay applications challenging penalties and redemption fine imposed under Sections 112 and 125 of the Customs Act, 1962. The issue was taken up for early disposal after waiving the pre-deposit requirements.

2. Confiscation of Consignment with Concealed Wrist Watches:
The central issue revolved around the confiscation of a consignment containing toothbrushes, diapers, and plastic bowls used to conceal wrist watches. The adjudicating authority found evidence of a scheme involving concealment, mis-declaration, and undervaluation orchestrated by the importer and his accomplices.

3. Enhancement of Value, Penalties, and Redemption Fine:
The appellants contested the penalties and redemption fine, arguing that the amounts imposed were excessive. The adjudicating authority upheld the enhancement of value for the concealed items but reduced the redemption fine from Rs. 4 lakhs to Rs. 1 lakh to ensure justice.

4. Allegations of Smuggling by CHA and Importer:
The involvement of the Custom House Agent (CHA) in the smuggling scheme was highlighted, with allegations of collusion with the importer. The judge found the penalties imposed on both the importer and the CHA to be justified due to the attempt to smuggle goods.

5. Reduction of Penalties and Redemption Fine:
While upholding the adjudicating authority's decision on the enhancement of value, the judge reduced the penalties imposed on the importer and the CHA. The penalty on the importer was reduced to Rs. 2 lakhs, and the penalty on the CHA was reduced to Rs. 1 lakh to balance the severity of the penalties with the circumstances of the case.

6. Conclusion:
The impugned order was upheld with modifications to reduce the redemption fine and penalties imposed on the appellants. The judgment aimed to strike a balance between upholding the law and ensuring fairness in the penalties imposed in light of the smuggling activities uncovered during the case.