2019 (11) TMI 1216 - AT - Customs

Mis-declaration of imported goods - import of 10500 kgs. of cloves of Sri Lankan origin - It was noticed that the goods do not conform to FSSAI Regulations - direction for re-export of goods - redemption fine - penalty. Levy of redemption fine - HELD THAT - The appellant is willing to re-export the goods and is not contesting the order passed directing the appellant to re-export the goods - The Hon ble Apex Court in the case relied upon by the ld. counsel for appellant in UNION OF INDIA VERSUS SANKAR PANDI 2010 (3) TMI 1247 - SC ORDER has affirmed the decision of the Hon ble High Court in SANKAR PANDI VERSUS UNION OF INDIA 2001 (12) TMI 83 - MADRAS HIGH COURT wherein it was held that redemption fine cannot be imposed when the goods have to be redeemed only for the purpose of export - the redemption fine imposed is unjustified and requires to be set aside Imposition of penalty - HELD THAT - The appellant ought to have made all efforts to import only goods which conforms to FSSAI Regulations. There being violation of said Regulations, the facts attract imposition of penalty under Section 112(a) of the Customs Act, 1962. However, the penalty of ₹ 2 lakhs imposed is on the higher side. In the interest of justice, the penalty is reduced to ₹ 50,000/-. Appeal allowed in part.

Summary

Issues:
1. Redemption fine imposed on re-export of goods.
2. Penalty imposed for importing goods not conforming to FSSAI Regulations.

Issue 1: Redemption Fine Imposed
The appellant imported cloves of Sri Lankan origin, found not conforming to FSSAI Regulations, leading to an order for re-export with a redemption fine of ?10 lakhs. The Commissioner (Appeals) reduced the fine to ?3 lakhs. The appellant, willing to re-export, argued against the redemption fine citing legal precedents. The Tribunal, following the Apex Court's decision, held that a redemption fine cannot be imposed when goods are to be redeemed for export only. Consequently, the redemption fine was set aside.

Issue 2: Penalty Imposed
The appellant contended that there was no intent to import non-compliant goods, referencing the contract with the supplier. Despite this, the Tribunal found a violation of FSSAI Regulations, warranting a penalty under Section 112(a) of the Customs Act, 1962. However, considering the circumstances, the imposed penalty of ?2 lakhs was deemed excessive. In the interest of justice, the penalty was reduced to ?50,000. The impugned order was modified accordingly, partially allowing the appeal.

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