2017 (2) TMI 48 - AT - Customs

Confiscation of goods - imposition of redemption fine and penalty - finished leather - non-satisfaction of norms and conditions laid down in Public Notice No.21/2009-14 as to the type of finished leather as declared - misdeclaration - Held that - the impugned order setting aside confiscation of goods and imposition of redemption fine and penalty only on the basis of apparent contradiction found by lower appellate authority between the two reports of CLRI is misconceived and an error-finding - At the same time, one of the export consignments not meeting the requisite standards cannot be attributed to intentional or obvious reasons on the part of the exporter. It could have very well been due to mistake or some negligence on their part - This being the case, there is case for reduction in redemption fine and penalty. Confiscation of the goods ordered by the original authority is restored - redemption fine imposed u/s 125 of the Customs Act, 1962 is reduced to ₹ 1,50,000/- and penalty of ₹ 2,50,000/- imposed on the appellant u/s 114 (ii) is also reduced to ₹ 1,00,000/-. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues involved:
1. Confiscation of goods for non-fulfillment of conditions and misdeclaration.
2. Imposition of redemption fine and penalty under the Customs Act.
3. Appeal against the decision of the Commissioner (Appeals).
4. Preliminary objection regarding the value involved in the appeal.
5. Request for reduction in redemption fine and penalty.

Analysis:

1. The case involved the confiscation of goods due to non-fulfillment of conditions and misdeclaration. The respondent had filed a shipping bill for the export of goods declared as "finished leather." However, a sample was found not to meet the required standards, leading to the confiscation of the goods. The original authority allowed redemption of goods on payment of a fine and penalty under the Customs Act.

2. The appeal was made against the decision of the Commissioner (Appeals) who had set aside the confiscation of goods, redemption fine, and penalty. The Revenue argued that the goods were not "finished leather" as per the CLRI report and that the confiscation and imposition of fines were justified. They highlighted a subsequent opinion of CLRI that seemed contradictory to the initial report.

3. The respondent's counsel raised a preliminary objection regarding the value involved in the appeal, arguing that it was below the limit for Revenue's appeal to CESTAT. However, the Revenue clarified that the duty involved in the disputed goods was significant.

4. The respondent contended that the failure to meet the standards was unintentional, as they were not aware of the specific requirements. They requested a reduction in the redemption fine and penalty based on this argument.

5. After hearing both sides and reviewing the facts, the Tribunal found that the lower appellate authority's decision to set aside the confiscation based on a perceived contradiction in the CLRI reports was erroneous. The Tribunal acknowledged that the non-compliance could have been a mistake or negligence rather than intentional. Consequently, the confiscation of goods was upheld, but the redemption fine and penalty were reduced significantly.

In conclusion, the Tribunal allowed the appeal, restored the confiscation of goods, but reduced the redemption fine and penalty imposed on the appellant under the Customs Act.