2018 (8) TMI 504 - AT - Customs

Quantum of Redemption Fine - personal penalties imposed on individuals - improper import without payment of duty on diesel - Held that - The total quantity of diesel seized was admittedly 103.657 MT on which the amount of duty comes to ₹ 8.78 lakhs only. Therefore, the redemption fine of ₹ 13 lakhs imposed on confiscation of diesel oil is not justified, therefore, redemption fine on this count deserved to be reduced. Confiscation of non-existent goods - Held that - This quantity was not available as the same was disposed of therefore, the goods which were not available for seizure the confiscation of non-existent goods cannot be made and no redemption fine can be demanded. Confiscation of the tug - Held that - Firstly, the valuation of tug was wrongly taken as ₹ 6.75 crores whereas it s admitted insured value declared is 1.90 Crores. Secondly, once the equal to duty amount redemption fine was imposed on the goods, the redemption fine of ₹ 1.75 Crore in respect of tug is exorbitant and not justified - redemption fine is to be reduced. Personal penalties on employees, namely, Sh. P P Radhakrishnan and Sh. Hanzel A Malik - Held that - These person are mere employees and performing their duties as per the instruction of their employer. There is no evidence that they have got any incentive out of the benefit derived by the appellant company - the employees cannot be penalized as they do not have belief that the goods are liable for confiscation, moreover, they are mere employee of the company working on fixed salary basis and there is no evidence on record that they were benefited by any act of evasion of duty by the company, therefore, the employees are not liable for penalty. As regard the appeal of Sh. Zoharbhai A Mallampattiwala, since the appellant is expired, his appeal shall stand abated. Appeal disposed off.

Summary

Issues:
1. Confiscation of diesel oil and vessel.
2. Imposition of redemption fine, penalty, and personal penalties.
3. Dispute over the quantum of redemption fine and penalties.
4. Employee liability for penalties.
5. Abatement of appeal due to the appellant's demise.

Analysis:

Issue 1: Confiscation of Diesel Oil and Vessel
The case involved the illicit import of diesel oil by the appellant company, leading to the confiscation of diesel oil and the vessel. The investigation revealed the illegal import of diesel oil in the tug Al-Vard, resulting in the seizure of the vessel and diesel oil valued at significant amounts. The appellant contested the confiscation and redemption fines imposed by the adjudicating authority.

Issue 2: Imposition of Redemption Fine, Penalty, and Personal Penalties
The appellant contested the quantum of redemption fine, penalties, and personal penalties imposed on the company and individuals involved. The appellant argued that the redemption fine on the vessel was excessive, considering the actual value and benefit derived from the illegal import. The appellant also challenged the penalties imposed on the director and employees, citing lack of personal gain and awareness of the illegal activities.

Issue 3: Dispute Over Quantum of Redemption Fine and Penalties
The Tribunal analyzed the quantum of redemption fine and penalties imposed, considering the benefit derived from the illegal import and the circumstances of the case. The Tribunal found the redemption fines on the diesel oil and vessel to be excessive and not commensurate with the actual duty amounts involved. The Tribunal reduced the redemption fines on both the diesel oil and vessel substantially based on legal provisions and precedents.

Issue 4: Employee Liability for Penalties
Regarding the penalties imposed on the employees, the Tribunal considered the employees' roles and lack of personal gain from the illegal activities. Citing legal judgments and precedents, the Tribunal concluded that the employees were not liable for penalties as they were acting under the instructions of the employer and had no knowledge or benefit from the evasion of duty. The penalties on the employees were set aside based on these considerations.

Issue 5: Abatement of Appeal Due to Appellant's Demise
The Tribunal noted the demise of the appellant director and ruled that the appeal of the deceased appellant stood abated. The Tribunal considered this aspect while delivering the final order on the case.

In conclusion, the Tribunal upheld the duty demand, interest, and a reduced redemption fine on the vessel and diesel oil. The redemption fine on the goods not available was set aside, and the penalties on the employees were revoked. The appeal of the deceased appellant was abated, and the Tribunal pronounced the final order on 07.08.2018.