2021 (3) TMI 937 - AT - Customs

Smuggling - Areca Nuts - sample did not conform to the standards laid down under Regulation 2.3.55 of the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 - HELD THAT - An identical issue came up for consideration before the Tribunal in the case of M/S. O.M.S. SIVAJOTHI MILLS VERSUS THE COMMISSIONER OF CUSTOMS 2019 (8) TMI 1039 - CESTAT CHENNAI where it was held that When the order as to the confiscation remains unchallenged, the importer accepts the order of confiscation and even the exporter offers willingness to accept back (re-export) the consignment, there cannot be any question of redemption fine. Therefore, the redemption fine imposed and upheld by the First Appellate Authority cannot sustain and is accordingly set aside - the redemption fine charged under Section 125 of the Customs Act, 1962 is unsustainable and the same is required to be deleted. Levy of penalty under Section 112 (a) of the Customs Act, 1962 - HELD THAT - A reading of the said Section makes it clear that the penalty under Section 112 (a) would be imposed in the case of improper importation of goods which has rendered the imported goods liable to confiscation under Section 111 and for this, it can be concluded that abetment is not a criterion. Apparently, Clause (a) of Section 112 has two limbs the first being improper importation of goods by any person who, in relation to any goods would render such goods liable to confiscation ; and the second limb starts with or abets the doing or omission or such an act. Hence, a mere importation that would render such goods liable to confiscation, is sufficient to attract penalty. Therefore, the case on hand gets covered under the mischief of Section 112 (a) ibid. The impugned order as regards the redemption fine is set aside - impugned order as regards the penalty under Section 112 (a) is modified - appeal is partly allowed.

Summary

Issues:
- Redemption fine under Section 125 of the Customs Act, 1962
- Penalty under Section 112 (a) of the Customs Act, 1962

Redemption Fine Issue:
The appellant imported Areca Nuts, rejected by FSSAI, leading to confiscation and imposition of a redemption fine. The Tribunal referenced a similar case where the fine is an alternative to confiscation. Since the importer did not challenge confiscation, the redemption fine was deemed unsustainable, and the Tribunal set it aside based on judicial precedents. The Tribunal ruled that the redemption fine cannot coexist with confiscation when the importer accepts the confiscation order and offers re-export. Consequently, the redemption fine was deleted under Section 125 of the Customs Act, 1962.

Penalty Issue:
Regarding the penalty under Section 112 (a) of the Customs Act, 1962, the Tribunal analyzed the provision, emphasizing that improper importation rendering goods liable to confiscation attracts penalty, irrespective of abetment. Citing a High Court decision upheld by the Supreme Court, the Tribunal concluded that mere importation leading to goods being liable to confiscation is sufficient to invoke penalty under Section 112 (a). Despite upholding the penalty applicability, considering the appellant's good faith, the Tribunal reduced the penalty to ?50,000. The Tribunal modified the impugned order, reducing the penalty under Section 112 (a) from ?2,00,000 to ?50,000 due to the appellant's genuine intentions.

In conclusion, the Tribunal set aside the redemption fine and modified the penalty under Section 112 (a) for improper importation, reducing it to ?50,000 due to the appellant's good faith. The appeal was partly allowed, providing relief to the appellant on the specific issues of redemption fine and penalty under the Customs Act, 1962.