2018 (4) TMI 1434 - AT - Customs

Redemption fine - Duty Entitlement Pass Book Scheme - Held that - There is nothing on record to indicate that the imports effected by the importer had been covered by a band. The non-availability of the confiscated goods is not in question. Therefore, even in the absence of a finding or any justification in the impugned order for non-imposition of fine, there is no scope for quantification of such fine without goods being available for redemption or a bond that covers recovery of fine - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal against order-in-original confirming demand, confiscation, and penalty under Customs Act, 1962.
2. Imposition of redemption fine under section 125 of Customs Act, 1962.
3. Validity of Duty Entitlement Pass Book Scheme and exemption availed.
4. Justification for non-imposition of redemption fine.
5. Procurement of scrips without awareness of background and intent to evade duty.

Analysis:
1. The appeal was filed by Revenue against the order-in-original confirming a demand of ?15,20,555 on the importer under section 28 of the Customs Act, 1962. The order also held the goods valued at ?47,88,503 liable to confiscation under section 111(o) of the Act and imposed a penalty of ?8,00,000 under section 112. However, the order omitted to impose a redemption fine under section 125 of the Customs Act, 1962.

2. The Tribunal noted that the importer had availed the Duty Entitlement Pass Book Scheme under the Foreign Trade Policy for obtaining scrips to import goods without duty payment. The importer purchased sixteen such scrips and imported goods against them, availing exemption to the extent of ?15,50,255.

3. The Revenue sought the imposition of a redemption fine based on previous Tribunal decisions and Supreme Court judgments. However, the impugned order did not quantify the fine despite finding the goods confiscable under the Act.

4. The Tribunal observed that the adjudicating authority had confiscated the goods under section 111(o) of the Customs Act, 1962. While the Supreme Court allowed for the imposition of a redemption fine under section 125 even when goods are not available, it required a bond covering the recovery of the fine. Since there was no evidence of such a bond covering the imports, the quantification of the fine was not possible.

5. The importer contended that they procured the scrips without full awareness of the background and argued that the import license obtained through misrepresentation was only voidable. Citing Supreme Court decisions, the Tribunal upheld the demand of duty but set aside the penalty imposed, as the intent to evade duty was not evident in the circumstances of the case.

In conclusion, the appeal of Revenue was dismissed due to the absence of justification for the non-imposition of the redemption fine. The Tribunal upheld the demand of duty but set aside the penalty imposed on the importer.