2020 (12) TMI 963 - AT - Customs

Permission to re-export confiscated goods - redemption fine and penalty - import of Run Flat Tyres from Dubai, UAE - goods were found to be branded radial car tyres and seized - case of Revenue is that wrongdoing on the part of the foreign exporter cannot be treated as bona fide act on the part of the importer and onus lies upon the importer to prove that it is the bona fide act and no mala fide intention existed - HELD THAT - The lower authority has concluded that though there was mis-declaration of brand and quality of goods imported, there was nothing on record to show that there was a malafide intention on the part of the importers. In fact, immediately after the fact of mis-declaration came to light, the importer conveyed the same to the foreign supplier who has instantly admitted mistake on their part and they were ready to take back the goods - Under such circumstances, the learned Commissioner (A) has rightly held that there was no malafide intention on the part of the importer and as such, imposition of penalty and redemption fine was not warranted. Imposing redemption fine and permission to re-export simultaneously - HELD THAT - Learned Commissioner (A) held that as there was no malafide intention on the part of the importer and re-export being permitted, imposition of redemption fine and penalty was not warranted - it is found that once the goods are allowed to be redeemed on payment of fine in lieu of confiscation, it is not open to the adjudicating authority to impose further conditions on the goods. Putting such a condition, would cause double jeopardy to the appellant. In the fact of absence of malafide intentions being established conclusively, and in the absence of no evidence to the contrary, redemption fine is not imposable on the impugned goods. Appeal dismissed - decided against Revenue.

Issues:
1. Mis-declaration of goods imported and confiscation under Customs Act, 1962.
2. Imposition of redemption fine and penalty.
3. Appeal against the order of Additional Commissioner of Customs.
4. Decision of Commissioner (Appeals) setting aside the redemption fine and penalty.
5. Bonafides of the importer in case of mis-declaration.
6. Permission for re-export and imposition of redemption fine simultaneously.
7. Tribunal and court decisions relied upon by the parties.

Issue 1: Mis-declaration of goods imported and confiscation under Customs Act, 1962
The case involved the import of Run Flat Tyres from Dubai, UAE, which were found to be branded radial car tyres upon examination by the Custom Authorities. The goods were seized due to mis-declaration. The Additional Commissioner of Customs held that the mis-declaration occurred without the importer's knowledge, leading to confiscation under Section 111(d), 111(l), and 111(m) of the Customs Act, 1962. A redemption fine and penalty were imposed, with an option given for re-exportation.

Issue 2: Imposition of redemption fine and penalty
The Additional Commissioner imposed a redemption fine of ?10,00,000 and a penalty of ?16,00,000 under Sections 125 and 112(a) (i) of the Customs Act, respectively. However, the Commissioner (Appeals) later set aside these fines and penalties in response to an appeal filed by the importer.

Issue 3: Appeal against the order of Additional Commissioner of Customs
The authorized representative for the department argued that the wrongdoing by the foreign exporter should not be considered a bona fide act by the importer. He contended that the importer had the onus to prove the bonafides and lack of mala fide intention. The department sought to set aside the order of the Commissioner (Appeals) and restore the Order-in-Original.

Issue 4: Decision of Commissioner (Appeals) setting aside the redemption fine and penalty
The Commissioner (Appeals) found that the importer had submitted evidence of error by the overseas supplier, establishing bonafides. Citing relevant case law, the Commissioner held that no penalty or redemption fine could be imposed due to the lack of malafide intention on the part of the importer.

Issue 5: Bonafides of the importer in case of mis-declaration
The Tribunal noted that the importer promptly informed the foreign supplier about the mis-declaration, leading to admission of the mistake by the supplier. The absence of malafide intention on the part of the importer was a crucial factor in determining the imposition of penalties and fines.

Issue 6: Permission for re-export and imposition of redemption fine simultaneously
The Commissioner (Appeals) allowed re-exportation based on the absence of malafide intention by the importer, following relevant court judgments. It was held that imposing redemption fine and penalty simultaneously would amount to double jeopardy and was not warranted in this case.

Issue 7: Tribunal and court decisions relied upon by the parties
The respondents relied on various court decisions, including the Supreme Court case of Siemens Limited Vs. Collector of Customs, to support their argument that the order of the Commissioner (Appeals) required no intervention. The Tribunal found no merit in the Revenue's appeal and upheld the decision of the Commissioner (Appeals) to set aside the fines and penalties.

This detailed analysis covers the key issues involved in the legal judgment, providing a comprehensive understanding of the case and the reasoning behind the decisions made by the authorities.

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