2019 (8) TMI 1341 - AT - Customs

Valuation of imported goods - enhancement of declared value - confiscation - quantum of redemption fine and penalty - HELD THAT - The enhancement of value has been ordered by the First Appellate Authority on the basis of concurrence given by the importer for such enhancement. There is no challenge to the order of confiscation, but Revenue is challenging the quantum of redemption fine and penalty, which stand reduced by the Ld. Commissioner (Appeals). The Ld. Commissioner (Appeals) has ordered reduction of redemption fine and personal penalty on the basis of ratio laid down by the Three Member Bench of CESTAT, Delhi in the case of Omex International Vs. commissioner of Cusoms, New Delhi 2015 (4) TMI 112 - CESTAT NEW DELHI (LB) . The Three Member Bench has taken the view that redemption fine of 10% and penalty of 5% of the value of the imported goods, would be appropriate in case of import violating Exim Policy Provisions - We find no reason to interfere with the findings of the Ld. Commissioner (Appeals) on the basis of such decision. Appeal dismissed - decided against Revenue.

Summary

Issues:
Delay in filing appeals before the Tribunal
Confiscation of imported goods for violation of Import Trade Control restrictions
Redemption fine and personal penalty imposed under Customs Act, 1962
Challenge to reduction of redemption fine and penalty by the Commissioner (Appeals)
Appropriate quantum of redemption fine and penalty
Application of precedent in determining redemption fine and penalty

Analysis:
The judgment by the Appellate Tribunal CESTAT KOLKATA addressed the issue of condoning the delay in filing appeals before the Tribunal. The delay was condoned based on the reasons provided in the Miscellaneous Applications filed by the Appellant. The appeals were allowed after considering the explanations for the delay.

Regarding the violation of Import Trade Control restrictions, the respondent imported used and worn unmutilated and fumigated mix cloth leading to confiscation of the goods under Section 111(d) of the Customs Act, 1962. The original adjudicating authority imposed a redemption fine and personal penalty under Sections 125 and 112(a) of the Act, respectively. The First Appellate Authority upheld the confiscation and value enhancement but reduced the redemption fine and penalty. The Revenue challenged this reduction, seeking a review of the penalties imposed.

During the hearing, the Ld. AR for the Revenue argued for an increase in redemption fine and personal penalty to deter repeated violations by the respondent. However, the Tribunal noted that the enhancement of value was based on the importer's concurrence and upheld the order of confiscation. The challenge was specifically against the reduced redemption fine and penalty by the Commissioner (Appeals).

The Tribunal examined the precedent set by a Three Member Bench of CESTAT, Delhi in a similar case and found the ratio of 10% redemption fine and 5% penalty appropriate for import violations. Based on this decision, the Tribunal upheld the reduction in redemption fine and personal penalty by the Commissioner (Appeals) and rejected the appeals filed by the Revenue. The impugned orders were upheld, and the Revenue's Stay Petitions were disposed of accordingly.