2017 (2) TMI 965 - AT - Customs

Imposition of redemption fine - penalty - import of copper scrap - enhancement of value - Held that - Since the enhanced value has been accepted by the appellant and discharged the Customs duty, there is no doubt such consignment is liable for confiscation u/s 111(d) & (m) of the Customs Act, 1962 in as much there was mis-declaration - the adjudicating authority in the facts and circumstances of this case, seems to have imposed penalty despite there being nothing in the consignment which was put through to 100%, despite this, in my view is not enough reason for imposing such a harsh penalty - ends of justice would be met if the redemption fine imposed in lieu of the confiscation is reduced, I reduce the redemption fine of ₹ 7,00,000/- to ₹ 4,00,000/- consequently penalty imposed on the importer-appellant u/s 112(a) of the Customs Act, 1962 is also reduced to ₹ 2,00,000/- from 3,00,000/- - appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
Appeal against Order-in-Original regarding redemption fine and penalty imposed on imported copper scrap.

Analysis:
The appeal was directed against the redemption fine and penalty imposed by the adjudicating authority. The appellant imported copper scrap at a declared price of US $6000 per metric ton. The Assessing Officer raised concerns regarding the submission of a Pre-shipment Inspection Certificate from a recognized agency, as required by the Foreign Trade Policy. The importer provided a certificate from an agency not on the recognized list, leading to a 100% examination of the consignment. The Assessing Officer rejected the transaction value due to suspicious invoice details and directed the importer to produce additional documents. Upon request, the Assessing Officer re-determined the value using Customs Valuation Rules and Section 14 of the Customs Act, which was accepted by the importer. The adjudicating authority ordered confiscation under Sections 111(d) and (m) of the Customs Act, allowing redemption on payment of a fine and imposing a penalty of ?3,00,000.

The Counsel argued that the non-production of a Pre-shipment Certificate should not be significant as the entire consignment underwent thorough examination. Legal precedents were cited to support the argument, emphasizing the importance of contemporaneous value for enhancements and limitations on penalties based on voluntary statements under the Customs Act. The Departmental Representative supported the lower authorities' findings.

Upon review, it was acknowledged that the imported consignment's value was enhanced after rejecting the initial transaction value at the importer's request. The accepted enhanced value led to the confiscation of the goods for mis-declaration, as per Sections 111(d) and (m) of the Customs Act. While the confiscation was deemed appropriate, the penalty imposed was considered harsh given the circumstances of the case. Consequently, the redemption fine was reduced from ?7,00,000 to ?4,00,000, and the penalty under Section 112(a) was reduced from ?3,00,000 to ?2,00,000. The judgment disposed of the appeal accordingly.