2023 (2) TMI 105 - AT - Customs

Quantum of redemption fine and penalty in lieu of confiscation - Valuation of imported goods - old and used worn clothing - declared value of the imported goods enhanced - HELD THAT - The enhancement of value has been ordered by the First Appellate Authority on the basis of concurrence given by the importer for such enhancement. There is no challenge to the order of confiscation, but Revenue is challenging the quantum of redemption fine and penalty, which stands reduced by the Ld. Commissioner(Appeals). The Ld.Commissioner(Appeals) has ordered reduction of redemption fine and personal penalty on the basis of ratio laid down by the Tribunal in the case of M/S. OMEX INTERNATIONAL VERSUS COMMISSIONER OF CUSTOMS, NEW DELHI 2015 (4) TMI 112 - CESTAT NEW DELHI (LB) . The Tribunal has taken the view that redemption fine of 10% and penalty of 5% of the value of the imported goods, would be appropriate in case of imports violating Exim Policy Provisions - there are no reason to interfere with the findings of the Ld. Commissioner (Appeals) on the basis of such decision. Appeal of revenue dismissed.

Summary

Issues:
Import of old and used worn clothing, enhancement of declared value, confiscation of goods, redemption fine, personal penalty, challenge to reduction of redemption fine and penalty.

Analysis:
The case involved the import of old and used worn clothing, with the declared value of the goods being enhanced during the original assessment process. The original adjudicating authority had confiscated the goods under Section 111(d) of the Customs Act, 1962, for violating Import Trade Control restrictions. Additionally, a redemption fine under Section 125 of the Act and a personal penalty under section 112(a) of the Act were imposed. The importer challenged this before the Commissioner (Appeals), who upheld the confiscation and value enhancement but reduced the redemption fine and penalty to 10% and 5% respectively.

The Revenue filed an appeal against the reduction of the redemption fine and personal penalty, arguing that a higher amount would act as a deterrent for frequent importers of such goods in violation of regulations. The appellate tribunal noted that the enhancement of value was based on the importer's consent and that there was no challenge to the confiscation order. The Revenue specifically contested the reduced redemption fine and penalty.

The tribunal observed that the reduction of the redemption fine and personal penalty by the Commissioner (Appeals) was based on a precedent set by the Tribunal in a previous case. Citing the decision in the case of Omex International Vs. Commissioner of Customs, New Delhi, the tribunal agreed with the ratio that a redemption fine of 10% and penalty of 5% of the value of imported goods would be appropriate for violations of Exim Policy Provisions. Consequently, the tribunal upheld the impugned order and rejected the appeals filed by the Revenue.

In conclusion, the tribunal maintained the decision of the Commissioner (Appeals) regarding the reduction of the redemption fine and personal penalty, citing the precedent established by the Tribunal in a similar case. The judgment emphasized the importance of consistent application of penalties for violations of import regulations.