2018 (11) TMI 102 - AT - Customs

Confiscation - goods attempted to be re-export - frozen Cuttlefish - appellant has failed to produce the required certificate from the Department of Animal Husbandry and Dairying, Govt. of India and also failed to produce NOC from competent Quarantine / Veterinary officer before clearance - imposition of redemption fine and penalty. Held that - Larger Bench decision in the case of Hemant Bhai R. Patel 2003 (2) TMI 87 - CEGAT, NEW DELHI is squarely applicable in the facts and circumstances of the present case. The Larger Bench of the Tribunal in the said case has held that Section 111 of the Customs Act gives power to customs officer to confiscate the goods imported, if any, all the provisions contained in sub-clauses is specific and Section 112 authorises the imposition of penalty. The Larger Bench has categorically held that it is open to the adjudicating authority to impose redemption fine as well as penalty even when permission is granted for re-exporting the goods. The adjudicating authority has the power to impose redemption fine and penalty - the ends of justice would be met if the redemption fine and penalty is reduced - appeal allowed in part.

Summary

Issues:
- Redemption fine and penalty imposed under Section 112(a) of the Customs Act, 1962
- Failure to produce required certificates from competent authorities
- Applicability of Section 111(d) of the Customs Act, 1962
- Justifiability of imposition of redemption fine and penalty
- Legal precedent and judgments relied upon by the appellant
- Larger Bench decision in the case of Hemant Bhai R. Patel Vs. CC, Ahmedabad

The appeal was filed against an order by the Commissioner of Customs that redeemed goods for re-export upon payment of a redemption fine of ?10 lakhs and imposed a penalty of ?1 lakh on the importer under Section 112(a) of the Customs Act, 1962. The appellant, an exporter of marine products, imported Frozen Cuttlefish without necessary certificates from the Department of Animal Husbandry and Dairying, Govt. of India, and NOC from a competent Quarantine/Veterinary officer. The Commissioner held the goods liable for confiscation under Section 111(d) of the Customs Act, 1962, and ordered re-export with a redemption fine and penalty. The appellant argued that the goods were not prohibited, and the penalties were unjustified due to the supplier's failure to provide required test reports. The appellant cited legal precedents to support the claim that redemption fine and penalty were not warranted after re-export is ordered.

The appellant contended that the impugned order was unsustainable as the goods were not prohibited, and penalties were unjustified due to the supplier's lapse in providing test reports. The appellant relied on legal precedents and Circular No.100/2003-Cus to argue against the redemption fine and penalty. However, the respondent defended the order, citing the appellant's failure to produce necessary certificates despite being a regular importer. The respondent argued that the case had been considered by a Larger Bench, which concluded that redemption fine and penalty could be imposed even after permission for re-export. The Larger Bench's decision in Hemant Bhai R. Patel case clarified the authority to impose fines and penalties in such cases.

After considering both parties' submissions and the material on record, the Tribunal found the Larger Bench decision in Hemant Bhai R. Patel case to be applicable. The Tribunal held that the customs officer had the power to confiscate goods under Section 111 of the Customs Act and impose penalties under Section 112. It was determined that the adjudicating authority could impose redemption fine and penalty even after granting permission for re-export. The Tribunal reduced the redemption fine from ?10 lakhs to ?5 lakhs and the penalty from ?1 lakh to ?50,000, deeming the original amounts excessive. The appeal was dismissed with the modified fines, aligning with the principles established in the Hemant Bhai R. Patel case.

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