2021 (3) TMI 1077 - HC - Customs

Reduction in quantum of redemption fine and penalty - foreign currencies - currencies were attempted to be exported in violation of the Foreign Exchange Management (Import and Export of Currencies) Regulation, 2000, which tantamount to prohibition under Section 11 of the Customs Act, 1962 - authority to give an option for redeeming the goods on payment of fine, which is a discretion provided under the Act. HELD THAT - We would have taken note of the said decision rendered by us in Commissioner of Customs (Air), Chennai-1 Vs. M/s.Premium Tours and Travels (Chennai) Pvt. Ltd. 2021 (2) TMI 659 - MADRAS HIGH COURT and its applicability to the facts of the case provided provided that there was no earlier direction issued by the Tribunal dated 30.8.2007 where there was a positive direction issued to the Adjudicating Authority to grant redemption of the foreign currencies on payment of reasonable redemption fine. The Adjudicating Authority passed the order dated 26.12.2007 by fixing the redemption fine at ₹ 32 lakhs and levying penalty at ₹ 5 lakhs. The Tribunal exercised its discretion based on the direction issued by it in the earlier round of litigation and also taking note of its decision - Appeal dismissed.

Summary

Issues:
1. Interpretation of Customs Act, 1962 regarding reduction of fine and penalty for attempted currency export.
2. Interference with order of Original Authority under Section 125 of the Act regarding redemption of goods on payment of fine.

Analysis:
1. The appeal under Section 130 of the Customs Act, 1962, challenged Final Order No.325 of 2009 passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai. The substantial questions of law included the Tribunal's reduction of fine and penalty for attempting to export currencies in violation of regulations. The Tribunal had interfered with the Original Authority's order, which allowed redemption of goods on payment of a fine. The case involved absolute confiscation of foreign currencies and imposition of penalties.

2. The first respondent had initially faced confiscation and imposition of fines. Upon appeal, the Tribunal directed the Adjudicating Authority to reconsider the case, allowing redemption on payment of a reasonable fine. Subsequently, the Adjudicating Authority permitted redemption on payment of ?32 lakhs and imposed a penalty of ?5 lakhs. Another appeal led to the Tribunal reducing the fine to ?7.5 lakhs and the penalty to ?1 lakh. The Revenue appealed against this modification.

3. The Revenue relied on a previous decision where the benefit of redemption was denied. However, the Court noted a positive direction in an earlier Tribunal order to allow redemption on payment of a reasonable fine. Considering this direction and the value of the goods, the Tribunal exercised discretion to reduce the fine and penalty. The Court found no substantial question of law, as the Tribunal acted based on its previous direction and decision. The appeal was dismissed, emphasizing the factual nature of the case and absence of legal issues.

This detailed analysis covers the interpretation of the Customs Act, 1962, the Tribunal's discretion in reducing fines and penalties, and the significance of previous orders in determining the outcome of the case.