2020 (4) TMI 356 - AT - Customs

Reduction in quantum of redemption fine and penalty - Confiscation - import of restricted item - mobile phones with batteries - HELD THAT - Non procurement of certificates for the batteries was a bonafide and inadvertent mistake on the part of the appellant. In any case, he had subsequently produced the certificate and as such had made good the lapse, if any. In such a scenario, imposition of penalty upon the appellant is not justified. The same is accordingly set aside. Confiscation of batteries - HELD THAT - Admittedly the same were without a certificate, though under a bonafide belief. As such, their confiscability has to be upheld. However, appreciating the facts and circumstances of the case, the redemption fine is reduced to ₹ 50,000/-. Appeal allowed in part.

Summary

Issues:
1. Requirement of BIS certification for imported goods.
2. Confiscation of goods for non-compliance.
3. Imposition of redemption fine and penalty under Customs Act.

Analysis:

Issue 1: Requirement of BIS certification for imported goods
The appellant imported goods declared as Mobile Phones, which required BIS certification under the Electronic and Information Technology Goods Order, 2012. The goods were found to have batteries not conforming to IS standard, lacking NEBIS Mark or BIS registration. The appellant stored the goods in a Customs bonded warehouse until obtaining the necessary BIS certification for the batteries. The appellant submitted the BIS certificate for the batteries after Customs Department intervention.

Issue 2: Confiscation of goods for non-compliance
The original Adjudicating Authority ordered the confiscation of goods with a redemption fine of ?10 lakhs and imposed a penalty of ?5 lakhs under Section 112(a)(i) of the Customs Act, 1962. The Commissioner (Appeal) reduced the redemption fine to ?6 lakhs and penalty to ?2 lakhs. The Tribunal reviewed the case and acknowledged that the non-procurement of certificates for the batteries was a genuine mistake by the appellant. The Tribunal upheld the confiscation of batteries due to lack of certification but reduced the redemption fine to ?50,000, considering the circumstances.

Issue 3: Imposition of redemption fine and penalty under Customs Act
The Commissioner (Appeal) recognized the case as a bona fide mistake and reduced the redemption fine and penalty. The Tribunal agreed that the appellant rectified the lapse by submitting the required certificate. Consequently, the Tribunal set aside the penalty imposed on the appellant, considering the circumstances of the case. The Tribunal partially allowed the appeal by reducing the redemption fine but upheld the confiscation of goods due to non-compliance with BIS certification requirements.

In conclusion, the Tribunal acknowledged the appellant's efforts to rectify the mistake, leading to the reduction of the redemption fine and setting aside of the penalty. However, the confiscation of goods was upheld due to non-compliance with BIS certification requirements.