2019 (8) TMI 1039 - AT - Customs

Liability of the appellant to redemption fine under Section 125 of the Customs Act, 1962 over and above confiscation - penalty u/s 112 (a) ibid - HELD THAT - As the heading itself points out, the fine i.e., redemption fine, is an option in lieu of confiscation and hence, both cannot run simultaneously, which means redemption fine is leviable only as an alternative to confiscation. The appellant here in this case has not questioned the confiscation and hence, there is no option available to it. Consequently, there is no question of exercising any option in lieu of confiscation. When the order as to the confiscation remains unchallenged, the importer accepts the order of confiscation and even the exporter offers willingness to accept back (re-export) the consignment, there cannot be any question of redemption fine. Therefore, the redemption fine imposed and upheld by the First Appellate Authority cannot sustain and is accordingly set aside. Penalty under Section 112 (a) of the Customs Act - HELD THAT - A reading of the above Section makes it clear that the penalty under Section 112 (a) would be imposed in the case of improper importation of goods which has rendered the imported goods liable to confiscation under Section 111 and for this, I am of the opinion that abetment is not a criterion. Apparently, Clause (a) of Section 112 has two limbs the first being improper importation of goods by any person who, in relation to any goods..would render such goods liable to confiscation ; and the second limb starts with or abets the doing or omission or such an act. Hence, a mere importation that would render such goods liable to confiscation, as indicated above, is sufficient to attract penalty - Penalty upheld. The impugned order as regards the redemption fine is set aside - The impugned order as regards the penalty under Section 112 (a) is modified - appeal allowed in part.

Summary

Issues:
Liability of the appellant to redemption fine under Section 125 of the Customs Act, 1962 and the penalty under Section 112 (a) ibid.

Redemption Fine Issue Analysis:
The appellant imported "Green Mung Beans" which were rejected by FSSAI for not meeting standards. The appellant requested re-export, and the Adjudicating Authority passed an order without a Show Cause Notice. The appellant sought redemption fine in lieu of confiscation under Section 125. The Ld. Advocate cited legal precedents, including the decision of the Supreme Court in M/s. Siemens Limited Vs. Collector of Customs, to support the request. The Ld. AR for the Revenue argued that food grains for human consumption must meet safety standards. The Ld. AR contended that the certificates provided did not meet Indian norms. The Tribunal found the redemption fine not applicable as the confiscation was unchallenged, and the importer accepted it. The decision was supported by legal precedents cited by the appellant.

Penalty Issue Analysis:
The appellant challenged the penalty under Section 112 (a) of the Customs Act. The Section imposes a penalty for improper importation of goods. The Tribunal interpreted the Section to require improper importation rendering goods liable to confiscation, without the need for abetment. Legal precedents, including the case of Sankar Pandi, were cited to support the penalty. However, considering the appellant's bona fides, the penalty was reduced to ?10,000. The impugned order on the penalty was modified accordingly. The Tribunal upheld the penalty but reduced the amount due to the circumstances of the case and the appellant's good faith.

In conclusion, the Tribunal set aside the redemption fine, as the confiscation was unchallenged, and modified the penalty under Section 112 (a) to ?10,000 due to the appellant's good faith. The appeal was partly allowed, with the decision pronounced in open court on 22.08.2019.