2017 (3) TMI 830 - AT - Customs

Redemption fine - penalty - import of second hand Multi-Functional Device (MFD) Copiers cum printers - imposition on the ground that the import was made without license and in contravention of the condition laid in para 2.17 of the Foreign Trade Policy, 2009-2014 - Held that - In the Order-in-Original the adjudicating authority has stated that market enquiry was conducted. No further discussions are seen made in this respect. The margin of profit is taken as 37.8 to impose the Redemption Fine and penalties. In view thereof, the Redemption Fine and penalty imposed are highly excessive. Reducing the Redemption Fine to ₹ 13 lakhs and the penalty to ₹ 6 lakhs would meet the ends of justice - appeal allowed - decided partly in favor of appellant.

Summary

Issues: Redemption fine and penalty imposed on imported second hand Multi-Functional Device (MFD) Copiers cum printers without license and in contravention of Foreign Trade Policy.

Analysis:
1. The appellants imported second hand MFD Copiers cum printers without a license, leading to the imposition of a redemption fine and penalty. The department assessed the value based on a Chartered Engineer Certificate, increasing it from ?35,50,593 to ?59,95,260. The adjudicating authority imposed a redemption fine of ?20 lakhs and a penalty of ?10 lakhs for contravening the conditions of the Foreign Trade Policy, 2009-2014.

2. The Commissioner (Appeals) reduced the redemption fine to ?18,50,000 and the penalty to ?8,50,000. The appellant, not disputing the enhanced value, contested the redemption fine and penalty as being excessive. The appellant argued that the profit margin of 37.8% used to calculate the fines was unreasonably high. The appellant sought a reduction in the fines as they exceeded 25% of the enhanced value.

3. The appellant's counsel contended that no data from the market enquiry, which determined the profit margin, was provided to the appellant. The appellant maintained that the fines were disproportionately high. The department, represented by the Ld. AR, defended the findings of the adjudicating authority, stating that a proper market enquiry was conducted to ascertain the profit margin.

4. The Tribunal, after hearing both sides, noted that while the appellant did not challenge the enhanced value, they disputed the redemption fine and penalty. The adjudicating authority's decision to impose fines based on a profit margin of 37.8% was deemed excessive. The Tribunal reduced the redemption fine to ?13 lakhs and the penalty to ?6 lakhs, without altering the duty demand or enhanced value. The impugned order was set aside and modified accordingly, partially allowing the appeal in favor of the appellant.