2022 (9) TMI 1167 - AT - Customs

Levy of redemption fine and penalty - re-export of goods - misdeclaration of goods - anti dumping duty - Import of assorted goods - Balloon machine, Plastic balloon pump, Party throw flower, Plastic clothing accessories, Load cell, Embroidery machine needle, Glitter paper, Encoder etc. - whether the Redemption Fine of Rs.6 lakhs imposed under Section 125 of the Customs Act, 1962 in regard to goods at Sl.No.6 7 to reexport and the penalty of Rs. 7 lakhs imposed under Section 112 (a) of the Act ibid is legal and proper? HELD THAT - The Hon ble jurisdictional High Court in the case of SANKAR PANDI VERSUS UNION OF INDIA 2001 (12) TMI 83 - MADRAS HIGH COURT relied upon the decision of the Hon ble Apex Court in SIEMENS LIMITED VERSUS COLLECTOR OF CUSTOMS 1999 (8) TMI 84 - SUPREME COURT has held that there cannot be any doubt that the petitioner is entitled to re-export the articles in question and for the abovesaid purpose, it is not necessary for him to pay redemption fine as imposed by the authorities. In the present case, it is also seen that on an earlier occasion, the very same goods were imported by the appellant-importer from the very same supplier through Nhava Sheva Port. The documents relating to the earlier imports have been furnished by the appellant and it is stated that they have been produced before the original authority also. Taking note of these facts into consideration and also relying upon the decision of the Hon ble jurisdictional High Court, the redemption fine imposed in the present case requires to be set aside. The appellant has argued to set aside penalty of Rs.7 lakhs imposed by the adjudicating authority. It has to be stated that the appellant is not contesting the reclassification or levy of differential duty - the penalty imposed under Section 112 (a) of the Customs Act, 1962 is proper. However, the penalty of Rs.7 lakhs appears to be on a higher side. The penalty calls for reduction and it is reduced to Rs.2,00,000/- (Rupees Two lakhs only) and ordered accordingly. Appeal allowed in part.

Summary

Issues Involved:
1. Classification and Valuation of Imported Goods
2. Applicability of Anti-Dumping Duty (ADD)
3. Imposition of Redemption Fine
4. Imposition of Penalty

Detailed Analysis:

1. Classification and Valuation of Imported Goods:
The appellant imported assorted goods and declared them under specific classifications. Upon examination, the Department found discrepancies in the declared classifications and values:
- Items declared as "Embroidery Machine Needles" were found to be sewing needles, attracting ADD.
- Glitter paper was found to be made of plastic, with a declared value deemed low.
- An electronic card was identified as a PCB card for embroidery machines, with its value also found to be low.
- A plastic balloon pump was identified as a hand pump, not an electric pump.

The Deputy Commissioner reclassified and reassessed these items, rejecting the declared values and ordering reclassification under different tariff headings.

2. Applicability of Anti-Dumping Duty (ADD):
The Department identified that the "Embroidery Machine Needles" imported from China attracted ADD as per Notification No.31/2017-Customs (ADD) dated 22.06.2017. The goods were reclassified, and the ADD was confirmed.

3. Imposition of Redemption Fine:
The original authority imposed a redemption fine of Rs.6 lakhs for the limited purpose of re-exporting the goods at Sl.Nos.6 & 7. The appellant contested this, arguing that when goods are re-exported, the market value, margin of profit, and customs duty payable are irrelevant for fixing redemption fine under Section 125 of the Customs Act, 1962. The Tribunal referenced the judgments in Siemens Ltd. and Sankar Pandi, which held that redemption fine is not imposable if goods are re-exported. Consequently, the Tribunal set aside the redemption fine.

4. Imposition of Penalty:
The original authority imposed a penalty of Rs.7 lakhs under Section 112 (a) of the Customs Act, 1962. The appellant argued that the misclassification was based on a bona fide belief and previous imports through Nhava Sheva Port, where the classification was accepted. The Tribunal acknowledged the appellant's lack of willful intent to misclassify or evade duty but noted the misdeclaration/misclassification of other goods. Considering these factors, the Tribunal reduced the penalty to Rs.2 lakhs.

Conclusion:
The Tribunal modified the impugned order by:
- Setting aside the redemption fine imposed for re-exporting the goods at Sl.Nos.6 & 7.
- Reducing the penalty from Rs.7 lakhs to Rs.2 lakhs.
The appeal was partly allowed in these terms.