2019 (1) TMI 80 - AT - Customs

Reduction in quantum of redemption fine and penalty - confiscation could not take place - second charge of misdeclaration of value - Section 111(m) of the Customs Act, 1962 - Department could not bring any evidence which showed that the value declared in the subject bills of entry were misdeclared - Held that - The redemption fine has been imposed on higher side. The imported goods were old and used garments and no proper market enquiry was conducted to ascertain the actual margin of profit (MOP), beside this, approximately 25% value was extra loaded without any reasonable justification and same was accepted by the importer who also incurred demurrage for more than one month. In these circumstances the redemption fine should have been of the lower amount. There is no mis-declaration of value and goods are not liable for confiscation under Section 111 (m) of the Act and appellant had accepted the enhanced value and duty was paid in excess on enhanced assessable value from declared value to USS 1.316 (when they only agreed up to USD 1.10) and the importer had paid the extra duty - enhanced assessed value is confirmed - confiscation under Section 111 (m) of the Act set aside but the confiscation under Section 111 (d) of the Act is upheld. Imposition of penalty - Held that - Since the goods were liable to confiscation only under Section 111(d) and have been confiscated, therefore imposition of penalty is sustainable in law - However, while imposing personal penalty the adjudicating authority observed in its OIO that in past in identical cases penalty equivalent to 10% was imposed and he imposed penalty of 11% giving no justification for such variation. The penalty should not be imposed in such a fashion but circumstances of each case and role of importer should be examined case to case basis before imposing personal penalty. Appeal allowed in part.

Summary

Issues Involved:
Delay in filing appeal before the Tribunal, Reduction of fine and penalty, Misdeclaration of value under Customs Act, 1962, Confiscation under Section 111(m) and 111(d), Imposition of penalty, Judicious exercise of discretion in imposing penalty.

Analysis:
The judgment by the Appellate Tribunal CESTAT KOLKATA involved various issues. Firstly, the Tribunal considered the delay in filing the appeal before them and granted condonation of the delay. Subsequently, the Tribunal addressed the main issue of the appeal, which was the reduction of fine and penalty imposed by the Commissioner (Appeals). The Commissioner had reduced the fine and penalty after finding that there was no misdeclaration of value in the goods under Section 111(m) of the Customs Act, 1962. The Tribunal noted that the only offense left for confiscation was the non-possession of a valid license under Section 111(d) of the Act.

Regarding the imposition of penalty, the Commissioner had imposed a penalty of 11% without proper justification, which was contested in the appeal. The Tribunal emphasized that the imposition of penalty should be based on a case-to-case examination of the circumstances and the role of the importer. Quoting a historical judgment, the Tribunal highlighted that discretion in imposing penalties should be exercised judiciously, following the rules of reason and justice. The Tribunal found that the penalty imposed was on the higher side and reduced it to 5% of the CIF assessed value under Section 112(a) of the Act.

Furthermore, the Tribunal examined the findings of the Commissioner (Appeals) in detail, considering the facts and records available. The Commissioner had confirmed the enhanced assessed value but set aside the confiscation under Section 111(m) while upholding the confiscation under Section 111(d) of the Act. The Tribunal agreed with the Commissioner's decision and found no infirmity in the impugned order, thereby dismissing the appeal filed by the Revenue. The Tribunal also disposed of the Stay Petition in light of the judgment.

In conclusion, the judgment by the Appellate Tribunal CESTAT KOLKATA addressed the issues of delay in filing the appeal, reduction of fine and penalty, misdeclaration of value under the Customs Act, 1962, and the judicious exercise of discretion in imposing penalties. The Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the appeal filed by the Revenue, emphasizing the importance of a fair and reasoned approach in imposing penalties in customs cases.