2019 (3) TMI 983 - AT - Customs

Relevant date for fixing redemption fine - seizure of Gold - Held that - The provision contained in Section 14 says that the value of the goods has to be arrived on the date of import / export. The delay in adjudication cannot be a factor for deciding the market value of the goods by the department. In the case of enhancement alleging non-declaration of correct value of goods, the basis of the similar imports during the relevant period is to be taken into consideration and not the value of the goods at the time of passing the order by the authority. In this line, when the redemption fine is imposed, the relevant date for fixing the redemption fine should be the market value of the goods prevailing at the time of seizure and not at the time of passing the order. The Five Member Larger Bench of the Tribunal had addressed the very same issue in the case of Omex India Vs. Commissioner of Customs 1992 (12) TMI 57 - CEGAT, NEW DELHI . It was held that the market price at the time of importation has to be taken into consideration for calculating the fine that has to be paid for redeeming the goods. The appellant is liable to pay redemption fine on the market value of the goods as it stood at the time of seizure which is ₹ 7,35,247.81 - The Commissioner (Appeals) has held that the margin of profit would range from 30% to 50%. Therefore, the redemption fine is reduced to ₹ 3,70,000/- - appeal disposed off.

Summary

Issues:
1. Determination of redemption fine based on market value of seized goods.
2. Interpretation of relevant provisions of Customs Act, 1962.
3. Applicability of market value at the time of seizure versus passing of order.

Analysis:
1. The case involved a dispute regarding the redemption fine imposed on seized gold biscuits. Initially, the Additional Commissioner of customs ordered absolute confiscation of the goods and imposed penalties. Subsequent appeals led to varied decisions on redemption fine calculation, with the Commissioner (Appeals) fixing it based on market value at the time of passing the order.

2. The appellant argued that the redemption fine should be determined based on the market value of the goods at the time of seizure, as per the Customs Act, 1962. Reference was made to Section 125 and Section 14 of the Act, emphasizing the importance of valuing goods at the time of import/export or seizure. The appellant cited the case of Rajkumar Knitting Mills (P) Ltd. Vs. Collector of Customs to support their stance.

3. The Hon'ble High Court remanded the matter to the Tribunal to decide whether the market value of the gold should be based on the date of seizure or the date of passing the order. The Tribunal, considering past precedents, held that the market price at the time of importation or seizure should be the basis for calculating the redemption fine. The Tribunal's decision was in line with the case of Omex India Vs. Commissioner of Customs, emphasizing the importance of valuing goods at the time of seizure.

4. The Tribunal concluded that the redemption fine should be based on the market value of the goods at the time of seizure, which was established at ?7,35,247.81. Despite the department's profit margin estimations, the redemption fine was reduced to ?3,70,000. The decision highlighted the significance of valuing goods at the time of seizure for determining redemption fines, irrespective of the duration of litigation or the date of passing the order.

5. The judgment emphasized the need to adhere to legal provisions and past precedents in determining redemption fines for seized goods, ensuring consistency and fairness in customs enforcement decisions. The appellant's appeal was disposed of based on the market value at the time of seizure, setting a precedent for similar cases in the future.