2018 (8) TMI 1025 - AT - Customs

Release of goods on payment of redemption fine - tug M.V. Shunter - Held that - The appellants submitted that M.V. Shunter are not the owner of the tug; it was imported on re-export basis; no foreign exchange was remitted against the other goods and that the applicants now obliged to immediately handover the said tug to the respectful owners - the request of the appellants can be accepted. The respondents are directed to release the tug on payment of redemption fine of ₹ 8,00,000/-; duty liability of ₹ 1,32,13,016/- may be appropriated from the bank guarantee submitted to the appellants; the appellants shall, however, replenish the bank guarantee to that extent in adherence to this Bench Order dated 07.05.2014. Application allowed in part.

Summary

Issues:
1. Appeal against Order-in-Original regarding demand and duty on 'M.V. Shunter' and 'Mercury Focus'
2. Request for release of tug on payment of redemption fine
3. Interpretation of Section 125 of the Customs Act, 1962
4. Appropriation of duty from bank guarantee
5. Ownership and re-export status of 'M.V. Shunter'

Analysis:

1. The appeal was filed against the Order-in-Original imposing a demand on 'M.V. Shunter' and duty on 'Mercury Focus.' The appellants requested the release of the tug on payment of redemption fine, which was initially rejected by the Superintendent of Customs, Cochin.

2. The appellants moved a miscellaneous application seeking an interim order allowing them to remove the goods on payment of redemption fine. The Counsel for the appellants argued for the release of the tug on payment of redemption fine due to urgency, while the Departmental Representative cited Section 125 of the Customs Act, 1962, stating that the owner is liable for duty and charges on confiscated goods.

3. After hearing both sides and examining the case records, it was noted that the appellants were not the owners of 'M.V. Shunter,' and it was imported on a re-export basis. The Bench found merit in the appellants' request for the release of the tug.

4. Consequently, the Tribunal directed the respondents to release the tug upon payment of the redemption fine. The duty liability of ?1,32,13,016 was to be appropriated from the bank guarantee submitted by the appellants, with an obligation for them to replenish the bank guarantee to that extent as per a previous Bench Order.

5. The Bench allowed the miscellaneous application to the extent of releasing the tug on payment of the redemption fine, emphasizing adherence to the previous Bench Order regarding the bank guarantee replenishment. The operative portion of the Order was pronounced in Open Court on 10/07/2018.