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2018 (9) TMI 937 - AT - CustomsImport of restricted goods - Scrap/ second hand goods - imposing an exemplary redemption fine and penalty without considering the margin of profit - Principles of Natural Justice - Held that - In the present case the impugned order has been passed without considering the margin of profit, which is normally considered while imposing the redemption fine and penalty - the differential duty in the present cases in all the three bill of entries is less than 1 lac. The ratio of the Darshan Singh & Company Vs. Commissioner of Customs, 2014 (10) TMI 842 - CESTAT NEW DELHI is applicable in the present case, where it was held that as evidence of margin of profit is not available therefore by adopting criteria of differential duty, quantum of redemption fine reduced, thus redemption fine and penalty can only be imposed after considering the margin of profit - Further, the redemption fine and penalty imposed in the present case is highly exorbitant and is liable to be reduced. Appeal allowed in part.
Issues:
- Appeal against common impugned order passed by Commissioner (Appeal) - Rejection of appeals by Commissioner (Appeal) - Confiscation of goods under Section 111(d) of the Customs Act, 1962 - Penal action under Section 112 of the Customs Act, 1962 - Imposition of redemption fine and penalty - Consideration of margin of profit in imposing redemption fine and penalty - Applicability of previous judgments in determining redemption fine - Reduction of redemption fine and dropping of penalty in all appeals Analysis: The appellant filed three appeals against a common impugned order passed by the Commissioner (Appeal) upholding the Order-in-Original, which rejected all appeals and involved the import of secondary Alloy Steel Bar. The goods were examined and deemed defective, leading to the rejection of the declared price. The adjudicating authority held that second-hand goods, other than capital goods, are restricted and can only be imported against authorization, leading to confiscation under Section 111(d) of the Customs Act, 1962, and penal action under Section 112. The appellant contended that the impugned order was unsustainable, as it did not properly consider the facts and law. The appellant argued against the imposition of an exemplary redemption fine and penalty, citing ignorance of restrictions during the first-time import. The appellant also challenged the adjudication order's basis for confiscation under Section 111(m) instead of Section 111(d) of the Customs Act, 1962. Regarding the redemption fine, the appellant argued that it was imposed without considering demurrage, detention charges, or the margin of profit. Citing previous judgments, the appellant sought a reduction in the redemption fine based on the principle of differential duty. The appellant emphasized the discretionary nature of Section 125 of the Customs Act, 1962, and the need for judicious exercise of discretion in imposing fines. The Assistant Revenue defended the impugned order, highlighting the policy violation admitted by the appellant and justifying the redemption fine and penalty based on the value of the imported goods. The Assistant Revenue argued against the need to consider the margin of profit for imposing fines. After considering the submissions and previous judgments, the Tribunal found the impugned order lacking consideration of the margin of profit, crucial for imposing redemption fines and penalties. The Tribunal noted the low differential duty in the cases and applied the principle from previous judgments to reduce the redemption fine to Rs. one lac in each case and drop the penalty in all three appeals, deeming the imposed fines highly exorbitant. In conclusion, all appeals were allowed partly, with the redemption fine reduced and penalties dropped in all cases.
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