2017 (2) TMI 186 - AT - Customs

Imposition of redemption fine - misuse of Advance License Scheme - whether the redemption fine is liable to be set aside on the ground that goods liable for confiscation, not available? - Held that - reliance was placed in the case of National Leather Cloth Manufacturing Company 2015 (8) TMI 1224 - BOMBAY HIGH COURT , where it was held that redemption fine is concept which arises in event goods are available and are to be redeemed. If goods are not available there is no question of redemption of goods - redemption fine set aside, as no goods available for confiscation - appeal dismissed - decided against Revenue.

Summary

Issues:
- Failure to confiscate goods and impose redemption fine despite holding them liable to confiscation
- Denial of benefit of Notification in a case involving misuse of Advance License Scheme
- Goods imported being liable to confiscation under Section 111(o) of the Customs Act, 1962
- Appeal filed by Revenue against the order of Commissioner

Issue 1: Failure to confiscate goods and impose redemption fine despite holding them liable to confiscation

The appeal was filed by the Revenue against the order of the Commissioner for not confiscating the goods and imposing a redemption fine despite holding the goods liable to confiscation. The impugned order upheld the demand of duty by denying the benefit of Notification and deemed the goods imported as liable to confiscation under Section 111(o) of the Customs Act, 1962. However, since the goods were not available for confiscation, they were not confiscated, and consequently, no redemption fine was imposed. The Revenue was aggrieved by this decision and hence filed an appeal.

Issue 2: Denial of benefit of Notification in a case involving misuse of Advance License Scheme

The grounds of appeal relied on the decision of the Tribunal in the case of Vibhuti Exports along with other case laws such as Dadha Pharma Pvt. Ltd., Weston Components Ltd., G.M. Exports, and Harbans Lal. The absence of representation from the respondent's side was noted. The case of National Leather Cloth Manufacturing Company was referenced, where the Hon'ble High Court of Mumbai emphasized the importance of the availability of goods as a criterion for confiscation and imposition of redemption fine under Section 125 of the Customs Act, 1962. The Court highlighted that the redemption fine concept arises when goods are available for redemption, and if the goods are not available, the question of redemption does not arise. The Tribunal, in this case, found that the goods were not seized, and therefore, redemption fine was not imposable.

Issue 3: Goods imported being liable to confiscation under Section 111(o) of the Customs Act, 1962

The judgment referenced the case of National Leather Cloth Manufacturing Company to emphasize the importance of the availability of goods for confiscation and redemption. It was noted that the goods imported were deemed liable to confiscation under Section 111(o) of the Customs Act, 1962. The Tribunal concluded that since the goods were not seized and were not available for confiscation, the question of imposing a redemption fine did not arise. The decision highlighted the specific violation alleged in the show cause notice and the absence of a bond or legal undertaking, leading to the Tribunal's opinion that redemption fine was not applicable in this case.

Issue 4: Appeal filed by Revenue against the order of Commissioner

The appeal filed by the Revenue against the order of the Commissioner was based on the failure to confiscate the goods and impose a redemption fine despite holding them liable to confiscation. The decision referenced various legal precedents and case laws to support the argument for imposing a redemption fine. However, the Tribunal's findings emphasized that since the goods were not available for confiscation, the concept of redemption fine did not apply. The judgment highlighted the specific conditions under which redemption fine can be imposed and clarified that in this case, the absence of seized goods led to the conclusion that redemption fine was not warranted.

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