2017 (1) TMI 74 - AT - Customs

Waiver of penalty, interest and redemption fine - valuation of imported goods - raw material Stainless Steel Powder - Held that - As regard the penalty the adjudicating authority rightly imposed equal amount of penalty as provided under 28AC of the Customs Act, 1962, which adjudicating authority has no discretion to reduce. As regard the option of 25% of penalty, we find that there are contrary judgments of the Hon'ble High Courts on the issue. Moreover adjudicating authority has not considered the judgments cited by the rivals. Therefore it is in the interest of justice that Commissioner should consider the judgments thereafter decide whether appellants are entitle for option of 25% penalty. As regard the demand of interest, we find that interest is chargeable under Section 28AB. However as submitted by the Ld. Counsel that the interest was chargeable at different rates in the different period in terms of notification issued from time to time - we find that adjudicating authority has arbitrarily applied @24% interest rates without any authority. Therefore the same is not sustainable. We hold that adjudicating authority should re-quantify the interest as per the rates prevailing from time to time. As regard the redemption fine, we find that since the goods were not available and same was neither seized nor released provisionally, the redemption fine was not warranted. This issue has been decided by this Tribunal larger bench in case of Shiv Kripa Ispat Ltd vs. Commissioner 2009 (1) TMI 124 - CESTAT MUMBAI - the redemption fine dropped. Issue of penalty and interest matter stands remanded to the original adjudicating authority - redemption fine dropped - appeal disposed off - partly decided in favor of appellant - matter on remand.

Summary

Issues:
Valuation of imported goods, settlement of show cause notices, penalty imposition, interest calculation, redemption fine imposition.

Valuation of Imported Goods:
The appellant imported raw material Stainless Steel Powder, leading to a dispute over the valuation of the goods. Three show cause notices were issued, with one settled and two remaining unsettled due to the amount involved. The appellant did not dispute the duty amount but contested the penalty, interest, and redemption fine imposed by the adjudicating authority.

Penalty Imposition:
The appellant's counsel argued that the penalty, interest, and redemption fine were the main issues. He contended that the penalty imposed under Section 114A was not applicable as the demand was beyond the five-year limit. Additionally, he claimed that the adjudicating authority did not offer the option of a 25% penalty reduction as per Section 28 AC. The Tribunal acknowledged conflicting judgments on this matter and recommended further consideration by the Commissioner.

Interest Calculation:
Regarding interest, the appellant's counsel highlighted discrepancies in the interest rate applied by the adjudicating authority. The interest rates varied during the relevant period, but a uniform rate of 24% was incorrectly applied. The Tribunal ruled that the interest should be recalculated based on the rates specified in the relevant notifications issued over time.

Redemption Fine Imposition:
The appellant's counsel argued against the redemption fine, stating that since the goods were neither available nor seized, and not released provisionally, the imposition of a redemption fine was unjustified. The Tribunal agreed, citing a previous larger bench decision, and dropped the redemption fine.

Conclusion:
The Tribunal decided that the main issues to be resolved were the penalty, interest, and redemption fine. It upheld the penalty imposed but suggested further examination of the 25% penalty reduction option. The interest calculation was deemed incorrect and needed to be recalculated based on the varying rates specified in the relevant notifications. The redemption fine was dropped due to the absence of the goods and the lack of provisional release. The matter was remanded to the original adjudicating authority for further action.