2017 (5) TMI 1176 - AT - Customs

Imposition of redemption fine in lieu of confiscation of material which was already disposed off/sold and not available for confiscation - Held that - the goods on which the Revenue has sought imposition of redemption fine were cleared and disposed of by the appellant. The said goods are not available for confiscation. The said goods were also not seized and released under any bond or undertaking. In these circumstances, the same cannot be confiscated and therefore, no redemption fine could have been imposed. Penalty - Held that - duty in excess of ₹ 36 lakhs has been confirmed against the appellant. It is noticed that the SCN alleges that imported goods were mis-declared. The impugned order confirmed the said mis-declaration. In these circumstances, I find that the quantum of penalty imposed on the importer is very low. Considering the role of importer in the mis-declaration, the penalty is revised from ₹ 1 lakh to ₹ 5 lakhs. Appeal allowed - decided partly in favor of Revenue.

Summary

Issues:
- Non-imposition of redemption fine in lieu of confiscation of disposed/sold goods
- Adequacy of penalty imposed on importer for willful mis-declaration and suppression of facts

Analysis:
1. The appeal was filed by the Revenue against the non-imposition of a redemption fine in lieu of confiscation of material that had already been disposed of and was not available for confiscation. The Revenue also contested the adequacy of the penalty imposed on the importer for willful mis-declaration and suppression of facts resulting in duty evasion. The Revenue raised two primary issues in the review order regarding the non-imposition of redemption fine and the low penalty amount.

2. The Revenue also filed appeals against several individuals apart from the importer. However, the review order only addressed the non-imposition of redemption fine and the penalty imposed on the importer. As a result, the appeals related to other parties were dismissed due to lack of grounds for challenging the decisions.

3. The appellant's counsel argued that since no bond was provided for the goods in question, which had already been disposed of, no redemption fine could be imposed. The counsel further contended that the penalty of ?1 lakh was adequate. However, the Revenue argued that even though the goods were not available for confiscation, they were still liable for confiscation, and thus a redemption fine should have been imposed.

4. The Tribunal observed that the goods in question had been cleared and disposed of by the appellant, were not available for confiscation, and had not been seized or released under any bond. Therefore, the Tribunal concluded that no redemption fine could be imposed in such circumstances.

5. Regarding the penalty imposed on the importer, the Tribunal noted that duty evasion exceeding ?36 lakhs had been confirmed, and the importer was involved in mis-declaration. Considering the gravity of the offense, the Tribunal revised the penalty from ?1 lakh to ?5 lakhs, finding the initial penalty amount too low. Consequently, the appeal by the Revenue was partly allowed, and the penalty was increased to ?5 lakhs.

6. In conclusion, the Tribunal addressed the issues of non-imposition of redemption fine and the adequacy of the penalty in a case involving willful mis-declaration and duty evasion. The decision highlighted the importance of imposing appropriate penalties based on the severity of the offense and the role of the parties involved in customs violations.