2019 (5) TMI 1534 - HC - Customs

Jurisdiction - power of adjudicating authority to grant conditional redemption - Imposition of penalty on importer u/s 112(a) of Customs Act - HELD THAT - Tribunal was justified in holding that, in the absence of a specific provision conferring power on the adjudicating authority to direct re-export of the goods as a condition precedent for grant of redemption on payment of fine, no such power was available to be exercised by the authorities concerned. It is only if power is conferred on the authority under the Act or the Rules, can it be exercised in terms thereof; and, in the absence of any specific provision in the Act or the Rules which confer on the adjudicating authority the power to direct the importer to re-export the goods, we find no error in the order of the Tribunal in setting aside the order-in-Original to this limited extent alone, much less a substantial question of law warranting interference u/s 130-A of the Act. The question whether the adjudicating authority has the power to pass an order afresh, rejecting grant of redemption, was neither in issue nor was it examined by the Tribunal. It would be wholly inappropriate for this Court, in proceedings u/s 130-A of the Act - Application dismissed.

Summary

Issues:
1. Appeal against the order passed by the Customs, Excise and Service Tax Appellate Tribunal.
2. Non-conformity of imported steel wires to prescribed standards.
3. Confiscation of goods under Section 111(d) of the Customs Act.
4. Imposition of penalty under Section 112(a) of the Customs Act.
5. Scope of Section 125 of the Customs Act regarding redemption of goods.
6. Authority of the adjudicating authority to direct re-export of goods as a condition for redemption.
7. Tribunal's decision to set aside the condition of re-export in the order-in-Original.
8. Dismissal of the appeal and observations regarding the authority of the adjudicating authority.

Analysis:

1. The appeal was filed against the order of the Customs, Excise and Service Tax Appellate Tribunal, which was in response to the appeal made by the respondent against the order passed by the Commissioner (Appeals) upholding the order-in-Original by the Additional Commissioner of Customs, Visakhapatnam. The issue arose from the non-conformity of imported steel wires to the standards specified under the Steel and Steel Products (Quality Control) Order, 2015.

2. The Additional Commissioner of Customs had directed the confiscation of the goods under Section 111(d) of the Customs Act and imposed a penalty of ?1,00,000 on the respondent. The matter was remanded by the Commissioner (Appeals) and re-adjudicated by the Additional Commissioner, who confirmed the confiscation of goods and allowed redemption only for re-export on payment of a redemption fine of ?2,00,000 under Section 125 of the Act, along with an additional penalty of ?1,00,000 under Section 112(a) of the Act.

3. The Tribunal held that the scope of Section 125 was limited, and the adjudicating authority did not have the power to compel re-export as a condition for redemption. The Tribunal allowed the appeal to the extent that the condition of re-export in the order-in-Original was set aside, emphasizing that the authority could either allow redemption on payment of fine or not allow redemption at all.

4. The Senior Standing Counsel argued for the authority to direct re-export as a condition for redemption under Section 125, but the Court disagreed, stating that such a power must be explicitly conferred by the Act or Rules. The Court upheld the Tribunal's decision, emphasizing that the authority could not direct re-export without specific statutory provisions.

5. The Court clarified that its decision did not prevent the adjudicating authority from reconsidering the redemption of goods without the condition of re-export. The Court dismissed the appeal, stating that the issue of the authority to pass a fresh order on redemption without re-export was not examined and should not be addressed in the current proceedings under Section 130-A of the Act.

6. In conclusion, the Court dismissed the appeal, closed any pending petitions, and made no order as to costs, emphasizing that the adjudicating authority could exercise its powers in accordance with the law, subject to the observations made in the judgment.