2019 (12) TMI 1145 - AT - Customs

Reduction in quantum of fine and penalty - import of restricted item - old used Multifunction Digital Print and copying machines (MFDs) with standard accessories - HELD THAT - A similar issue came up before the Hon'ble High Court of Kerala in COMMISSIONER OF CUSTOMS VERSUS NAVPAD ENTERPRISES 2009 (6) TMI 696 - KERALA HIGH COURT wherein, in similar circumstances, the goods were allowed to be cleared for home consumption subject to payment of fine of 10% and 5% penalty of the enhanced value of the goods. The redemption fine reduced to 10% of the enhanced value of the imported goods and penalty is reduced to 5% of the enhanced value of the imported goods - appeal allowed.

Summary

Issues:
Reduction in fine and penalty, valuation of imported goods, authorization for import, confiscation under Customs Act, imposition of penalty, clearance of goods for home consumption, reduction of fine and penalty based on precedent.

Reduction in Fine and Penalty:
The appellant sought a reduction in fine and penalty while not contesting the valuation issue. The Commissioner (Appeals) allowed clearance of the goods for home consumption subject to payment of duty on the enhanced value and imposed a redemption fine of ?6 lakhs along with a penalty of ?3,45,304. The appellant prayed for a reduction in fine and penalty, citing a similar case before the High Court of Kerala where goods were cleared subject to a fine of 10% and a penalty of 5% of the enhanced value. The Tribunal, relying on the Kerala High Court decision, reduced the redemption fine to 10% and the penalty to 5% of the enhanced value of the imported goods.

Valuation of Imported Goods:
The imported goods, 102 Units of old and used Multifunction Digital Print and copying machines, were examined by a Chartered Engineer who found only 101 pieces of the machines in the consignment, along with one Transient Voltage Surge Suppressor. The value of the machines was appraised at ?19,18,356 (CIF) as opposed to the declared value of ?17,09,867. The Chartered Engineer certified the functionality and residual life of the machines. The shed Superintendent also reported on the examination, mentioning the possession of necessary authorizations by the appellant and their efforts to obtain required authorizations for import.

Authorization for Import and Confiscation under Customs Act:
The respondent ordered absolute confiscation of the goods under Sections 111(d) and 111(m) of the Customs Act, citing that the goods were not importable due to being second-hand machines without the required authorization from the Directorate General of Foreign Trade (DGFT). The order included an option for re-exporting the goods and imposed a penalty under Section 112(a) of the Customs Act. The Commissioner (Appeals) allowed clearance for home consumption upon payment of duty on the enhanced value, imposing a redemption fine and penalty. The appellant requested a reduction in the imposed fine and penalty, which was granted by the Tribunal based on a precedent set by the Kerala High Court.

Clearance of Goods for Home Consumption:
The Commissioner (Appeals) allowed clearance of the goods for home consumption subject to payment of duty on the enhanced value, imposing a redemption fine and penalty. The appellant sought a reduction in the redemption fine and penalty, which was granted by the Tribunal based on a similar case precedent from the High Court of Kerala.

This detailed analysis covers the issues of reduction in fine and penalty, valuation of imported goods, authorization for import, confiscation under the Customs Act, imposition of penalty, and clearance of goods for home consumption, along with the decision and reasoning provided by the Tribunal.