2017 (2) TMI 423 - AT - Customs

Imposition of redemption fine and penalty - classification of goods - Opel Glassware and not Ceramic Dinner sets - misdeclaration of description and value of goods - Held that - The authority in the impugned order however permitted re-export of the goods on the same amount of redemption fine as per the prayer made by the importer. From para-3 of the impugned order it is seen that the prayer for re-export was made by the appellant for the reason that they cannot afford to pay the ADD. Taking into account the acts and omissions committed by the importer which resulted in violation of the Customs Act, 1962, penalty imposed on them u/s 112 (a) was justified; even that was reduced to ₹ 6,00,000/- by the lower appellate authority - no scope for further reduction, or waiver of redemption fine and penalty - appeal dismissed.

Issues:
1. Imposition of redemption fine and penalties on importer.
2. Setting aside of penalty on the director of the importing firm.
3. Dispute over the nature of the importing firm.
4. Appeal against the confiscation of goods and imposition of fine and penalty.

Issue 1: Imposition of Redemption Fine and Penalties on Importer
The case involved the importation of Opel Glassware mis-declared as Ceramic Dinner sets. The original authority re-determined the assessable value, confirmed the ADD demand, and imposed fines and penalties. The Commissioner (Appeals) upheld the re-quantification of assessable value but allowed redemption of goods on payment of a fine for re-export. The lower appellate authority reduced the penalty on the importer, considering it a proprietary firm. The Tribunal, noting the investigations and partnership nature of the importer, restored a reduced penalty of ?3,00,000 under Section 114 AA.

Issue 2: Setting Aside of Penalty on Director of Importing Firm
The department appealed against the setting aside of the penalty on the director of the importing firm, arguing that investigations revealed the importer was a partnership firm, not proprietary. The Tribunal agreed that the penalty on the director should be restored, considering the role played and the provisions of the Customs Act, 1962. The penalty under Section 114 AA was reduced to ?3,00,000, taking into account the fines and penalties already imposed.

Issue 3: Dispute Over the Nature of the Importing Firm
There was a dispute regarding the nature of the importing firm, with the department contending it was a partnership firm. The Tribunal found that the lower appellate authority was mistaken in treating the importer as a proprietary firm. Considering the penalty imposed on the director and the partner's role, a reduced penalty of ?3,00,000 was restored.

Issue 4: Appeal Against Confiscation of Goods and Imposition of Fine and Penalty
The department was aggrieved by the setting aside of the penalty on the director, while the importer contested the confiscation of goods and imposition of fines and penalties. The Tribunal upheld the imposition of fines and penalties on the importer, allowing re-export of goods on payment of a redemption fine. The appeal filed by the importer was dismissed, noting that sufficient relief had already been granted by the lower appellate authority.

In conclusion, the Tribunal disposed of both appeals by reinstating a reduced penalty on the director of the importing firm and upholding the fines and penalties imposed on the importer for mis-declaration and violation of the Customs Act, 1962.

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