2016 (7) TMI 360 - AT - Customs

Valuation - Classification of imported goods - whether to be classified as Integrated Receiver Decoder also known as setup Box or Digital Satellite Receiver - benefit of exemption contemplated by Notification No. 21/2002-Cus dated 01.03.2002 - Appellant only contested against the redemption fine and penalty imposed without disputing the duty demanded. Held that - Without going into the details of the duty liability which remained undisputed by the appellant, it has become necessity to look into the circumstances of imposition of redemption fine and penalty. While both sides are on rivalry submission as to the declaration of goods as presented and the appellant does not dispute classification as well as description of the goods, ld. Adjudicating authority had not conducted market enquiry to determine the market value for imposition of redemption fine. He acted arbitrarily and imposed of redemption fine @ 50% of the assessed value. The goods imported were supplied by the appellant to the cable operators. To reduce the litigation and also considering that imposition of redemption fine @ 5% of the assessed value would be justified in absence of market value determined by the adjudicating authority, that is ordered. Similarly levy of penalty of ₹ 1,00,000/- lakh would be justified for the technical breach of law on the facts and circumstances of the case. In the result, the appeal filed by the appellant company is partly allowed reducing the redemption fine from 50% to 5% of assessable value of the goods as well as penalty reduced to ₹ 1,00,000/-.

Summary

Issues:
Disputed classification of goods, imposition of duty, redemption fine, penalty under Customs Act, 1962, personal penalties on individuals involved.

Analysis:
The case involved a dispute over the classification of goods imported by the appellant, initially declared as "Integrated Receiver Decoder" but contested by Revenue as "Digital Satellite Receiver." Despite the appellant agreeing to Revenue's assertion, appropriate duty was imposed, along with a redemption fine and penalties under the Customs Act, 1962. The appellant challenged the redemption fine and penalties, citing confusion due to changes in exemption notifications. The appellant did not contest the duty demanded, acknowledging the discharge of duty liability. Revenue argued mis-declaration of goods, justifying the imposition of penalties and fines.

Upon hearing both sides, the Tribunal focused on the imposition of redemption fine and penalties. It noted the lack of market enquiry by the adjudicating authority to determine the market value for the redemption fine, criticizing the arbitrary imposition of a fine at 50% of the assessed value. The Tribunal deemed a 5% redemption fine and a penalty of ?1,00,000 as more appropriate given the circumstances. Regarding personal penalties on four individuals, the Tribunal found no evidence of their breach of law, leading to the waiver of penalties against them.

Ultimately, the Tribunal partly allowed the appeal by the appellant company, reducing the redemption fine to 5% of the assessable value and lowering the penalty to ?1,00,000. The appeals filed by the four individuals were also allowed, with the penalties imposed on them being waived. The judgment aimed to balance the imposition of fines and penalties based on the specific circumstances of the case, ensuring fairness and justice in the adjudication process.