2018 (7) TMI 81 - AT - Customs

Quantum of redemption fine and penalty - confiscation of excess quantity of mobile phones present in the consignment - the appellants have all along been requesting for reduction in redemption fine and penalty since the differential duty liability comes to only ₹ 19,000/- - Held that - When the duty liability of the imported goods valued at ₹ 3,87,310/- is only around ₹ 19,000/-, the quantum of redemption fine of ₹ 2,00,000/- imposed is surely not commensurate with the differential duty liability - Further, while deciding the quantum of redemption fine, the facts and circumstances including the margin of profit, market price of the goods confiscated etc., have to be taken into account. There is no such exercise forth-coming in the impugned order. The appeal is allowed to the extent of reducing the redemption fine under Section 125 ibid to ₹ 50,000/- without making any further interference in the impugned order - penalty do not require any interference - appeal allowed in part.

Summary

Issues:
1. Confiscation of excess goods in an import consignment.
2. Reduction of redemption fine and personal penalty imposed under the Customs Act, 1962.

Analysis:
1. The case involved the confiscation of excess goods in an import consignment of mobile phones. The appellant filed a Bill of Entry for 440 mobile phones but 140 additional phones were found during examination. The entire consignment was confiscated under Section 111(m) of the Customs Act, 1962. The adjudicating authority provided an option for redemption under Section 125 with a fine of &8377; 5,00,000 and imposed a penalty of &8377; 2,00,000 under Section 112(a). On appeal, the Commissioner reduced the redemption fine to &8377; 2,00,000 and the personal penalty to &8377; 20,000. The appellant challenged this decision before the forum.

2. During the hearing, the appellant argued that only the excess goods valued at &8377; 3,87,310 should be confiscated as per Section 111(m). They contended that the redemption fine was not justified considering the value of the confiscated goods and claimed they were unaware of the excess goods. The respondent supported the impugned order, stating that the Commissioner had already reduced the fine and penalty judiciously.

3. The Tribunal analyzed the facts and determined that the redemption fine of &8377; 2,00,000 was disproportionate to the differential duty liability of around &8377; 19,000. Section 125 allows for payment of a fine in lieu of confiscation, considering factors like profit margin and market price. The Tribunal found that the impugned order did not consider these factors and reduced the redemption fine to &8377; 50,000. However, the personal penalty imposed was deemed reasonable and was not further reduced.

4. In conclusion, the appeal was allowed to the extent of reducing the redemption fine to &8377; 50,000 without interfering with the impugned order regarding the personal penalty. The Tribunal emphasized the need for proportionality in determining fines under the Customs Act, ensuring justice is served in such cases.