2016 (12) TMI 1151 - AT - Customs

Imposition of redemption fine and penalties - clandestine removal - whether the imposition of redemption fine of ₹ 2 lakhs is legal for the reason that the goods are not available for confiscation? - Held that - reliance placed on the decision of the case of Dev Anand Agarwal Versus CC, New Delhi 2016 (3) TMI 513 - CESTAT NEW DELHI , where it was held that no redemption fine can be imposed when the goods are not available for confiscation - imposition of redemption fine of ₹ 2 lakhs is not within the provisions of law and therefore is set aside. Whether the penalty of ₹ 1,10,000/- imposed on M/s. EPVL and ₹ 50,000/- imposed on Shri Aman Garg are sustainable? - Held that - the acts committed by the appellants with regard to removal of logs, it has to be stated that there is some amount of intention to remove the logs without seeking permission and against the law applicable to the situation of bonded warehouse. The act of the appellants in bringing wood cutting machine and generator to the premises in order to tamper with the logs and cutting them into pieces before the inspection by the Customs officers has to be viewed seriously - penalty of ₹ 1,10,000/- imposed on M/s. EPVL is sustained - the penalty of ₹ 50,000/- imposed on Shri Aman Garg, is on the higher side. Thus, the imposition of penalty of ₹ 20,000/- on Shri Aman Garg would meet the ends of justice. Appeal partly allowed - decided partly in favor of appellant.

Summary

Issues involved:
Redemption fine and penalties imposed on the appellant.

Analysis:
1. Imposition of Redemption Fine:
The case involved a dispute regarding the legality of imposing a redemption fine of ?2 lakhs on the appellant for removing 34 timber logs without approval. The appellant argued that since the goods were not available for confiscation, the imposition of the redemption fine was not justified. Referring to the judgment in Dev Anand Agarwal Vs. CC, New Delhi, it was held that when goods are not available for confiscation, redemption fine cannot be imposed. Consequently, the redemption fine of ?2 lakhs was set aside.

2. Penalties Imposed:
The next issue addressed was the sustainability of the penalties imposed on the appellant and the Director of the company. The appellant claimed that they removed the logs for technical testing purposes and had no intention to evade duty. However, the respondent contended that the appellants tampered with the logs in the bonded warehouse, indicating an intention to evade duty. The Tribunal found that the actions of the appellants, including bringing wood cutting equipment to tamper with the logs, demonstrated an intent to bypass regulations. As a result, the penalty of ?1,10,000 on the company was upheld. However, the penalty of ?50,000 on the Director was considered excessive, and it was reduced to ?20,000 to ensure justice was served.

3. Final Decision:
In conclusion, the Tribunal partially allowed the appeals. In appeal No. E/344/2008, the imposition of the redemption fine was set aside, while the penalty of ?1,10,000 was upheld. In appeal No. E/345/2008, the penalty was reduced from ?50,000 to ?20,000. The judgment provided consequential reliefs as applicable, bringing the case to a close with the pronouncement made in open court.