2017 (1) TMI 915 - AT - Customs

Imposition of redemption fine and penalty - valuation of imported goods - secondhand 4 cylinders motor vehicles diesel engines - confiscation on the ground that all the goods are secondhand goods other than capital goods and are restricted for import and can be imported only in accordance with the public notice or the licence issued on this behalf - Held that - valuation as adopted by the first appellate authority and the adjudicating authority cannot be faulted with - The confiscation of the secondhand diesel engines which are imported is also upheld as these diesel engines are secondhand in nature and should have been imported only with a specific licence which was not done so. Since the goods are liable for confiscation under Section 111(d) of the Customs Act, 1962, penalty has been correctly imposed under Section 112(a) of the Customs Act, 1962. However, the redemption fine imposed by the adjudicating authority is on the higher side. It has been a consistent view of the Tribunal that redemption fine should be 20% of the enhanced value of the goods. Accordingly, we hold that the goods are liable for confiscation and can be redeemed on payment of redemption fine which is equivalent to 20% of the enhanced value of the engines. Appeal disposed off - decided partly in favor of appellant, by reduction of quantum of redemption fine.

Summary

Issues:
Appeal against orders-in-appeal regarding redemption fine and penalty on imported secondhand diesel engines without specific license.

Analysis:
The judgment involves multiple appeals raising a common question of law related to redemption fine and penalty imposed on imported secondhand diesel engines without the required special license. The Tribunal heard both sides and noted that one appeal was infructuous and dismissed it accordingly. The remaining appeals were directed against specific orders-in-appeal related to the redemption fine and penalty. The issue at hand was the confiscation of imported secondhand diesel engines due to lack of a specific license for import and misdeclaration of goods' value.

Upon considering the arguments presented, the Tribunal found that the enhancement of value by the adjudicating authority was justified as the imported goods were secondhand diesel engines requiring a special license for import, which the appellant did not possess. The transaction value was correctly rejected, and the expert appraiser's valuation was deemed appropriate. The Tribunal upheld the confiscation of the goods under Section 111(d) of the Customs Act, 1962, and the imposition of penalty under Section 112(a) of the same Act.

Regarding the redemption fine, the Tribunal noted that it should typically be 20% of the enhanced value of the goods. Therefore, the redemption fine imposed was deemed excessive, and the Tribunal reduced it accordingly. The penalties imposed by the lower authorities were considered proportionate based on previous Tribunal decisions in similar cases, and thus, they were upheld without interference.

In conclusion, the appeals were disposed of by reducing the redemption fine while upholding the valuation of the goods, the confiscation, and the penalties imposed. The judgment was pronounced in court on 28.12.2016 by the Tribunal.