2020 (4) TMI 247 - AT - Customs

Enhancement of redemption fine on the imported goods - enhancement of penalty - goods were removed from the Customs area by the importer appellant without filing bill of entry and without paying any duty whatsoever - confiscation - HELD THAT - It is true that after removing the goods, the importer had, on his own, filed a bill of entry and when it was discovered that the goods were removed, has explained that they were removed by mistake as well as their own mistake because of which their importer goods were mixed up and taken out all along with some domestic goods from the custody of the custodian. It is also true that they have returned the goods to the customs after such discovery. These are mitigating factors in this case. The value of the goods declared was ₹ 83,13,505/-. The maximum redemption fine imposable on confiscation is equal to the market value of the goods. However, the adjudicating authority has imposed a fine of only ₹ 2,50,000/-. The penalty which is imposable under section 112 is equal to the value of the goods. However, the penalty which is imposed, is a small fraction of the value of the goods i.e. ₹ 30,000/- only. Both fine and penalty are fair and not unreasonable - considering the totality facts of the case, it is found that reduction of redemption fine from ₹ 2,50,000/- to ₹ 2,00,000/- and penalty from ₹ 30,000/- to ₹ 25,000/- would meet ends of justice. Appeal allowed in part.

Summary

Issues:
1. Customs appeal seeking enhancement of redemption fine and penalty.
2. Assessee's appeal against fine and penalty imposed by adjudicating authority.

Analysis:

Issue 1: Customs appeal seeking enhancement of redemption fine and penalty
The Revenue filed an appeal seeking enhancement of the redemption fine and penalty imposed on the imported goods. The appeal was based on the grounds that the redemption fine of ?2,50,000 and penalty of ?30,000 were inadequate. However, the Tribunal noted the Government of India's litigation policy, which states that Customs appeals involving amounts below ?10.00 lakhs should not be pursued by the Revenue. Since the amounts involved in this case were below the threshold, the Customs appeal was rejected without discussing the merits.

Issue 2: Assessee's appeal against fine and penalty
The appellant, an importer, filed an appeal seeking to set aside the fine and penalty imposed by the adjudicating authority. The appellant argued that the goods were cleared as domestic cargo due to a mistake by the custodians, and they rectified the error by filing a Bill of Entry and returning the goods. The Tribunal, after considering the arguments, found that the goods were removed without proper procedures, making them liable for confiscation under Sections 111(j) and 111(m) of the Customs Act, 1962. The Tribunal emphasized that the intention to remove the goods without permission is not essential for confiscation under Section 111. Therefore, both the importer and the custodian were held liable for penalty under Section 112.

The Tribunal acknowledged the mitigating factors presented by the importer, such as voluntarily returning the goods and declaring the value accurately. While the redemption fine and penalty imposed were deemed fair, the Tribunal decided to reduce the redemption fine to ?2,00,000 and the penalty to ?25,000 to meet the ends of justice. Consequently, the assessee's appeal was partly allowed, with the modified fines.

In conclusion, the Revenue's appeal was dismissed under the litigation policy, while the assessee's appeal was partly allowed by reducing the redemption fine and penalty. Both appeals were disposed of accordingly.