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2023 (5) TMI 1134 - AT - CustomsImposition of Redemption Fine and Penalty disproportionately - Valuation of imported goods - gold dore bars - rejection of transaction value - re-determination of value - benefit of concessional rate of CVD @ 8% ad-valorem claimed under Sr. No. 318 of Notification 12/2012-Cus dated 17.03.2012 against DGFT License - whether in the facts of the commissioner the case there is a contentious conduct of the appellant on imposing fines and penalties as per the impugned order? HELD THAT - The Bar no. 1 has been permitted for re-export even the value that has been determined is less than 1 Lakh above the value declared. The redemption filed imposed of Rs. 20 Lakhs on such differential value cannot be justified and needs to be commensurate with the differential value which is only Rs. 86,541/- in case of bar 1. Taking note of the fact that as per the impugned order itself if it is a case of undervaluation, undervaluation is only of Rs. 86,541/-. Redemption filed of Rs. 20 Lakhs needs to be reduced consequently - the same is reduced to Rs. 50,000/-. In respect of bar 2, there is no contravention vis-a-vis claiming the benefit of exemption notification. None of the test reports have shown a purity level of more than 95% there can be a case for undervaluation on which total undervaluation can be Rs. 3,12,735/- by the adjudicating authority involving total duty of Rs. 25000/-. Redemption filed imposed in terms of Section 118 cannot be justified in the present case. In case of bar 2 the same is set aside. For undervaluation of the Gold Bar 2, a penalty of Rs.10 Lakh cannot be justified and is reduced to 10,000/- under Section 112 A of the Customs act. Appeal allowed in part.
Issues Involved:
1. Rejection of transaction value and re-determination of value of imported gold dore bars. 2. Confiscation and redemption of gold dore bars under relevant sections of the Customs Act and Foreign Trade Act. 3. Imposition of personal penalty on the importer for alleged violations. Summary: Issue 1: Rejection of Transaction Value and Re-determination of Value The appeal is against the order rejecting the transaction value of gold dore bars and re-determining their value under Section 14 of the Customs Act, 1962, read with Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The re-determined values were Rs. 1,24,81,754 for Bar No. 1 and Rs. 1,21,94,509 for Bar No. 2 based on purity tests conducted by the National Test House (NTH). Issue 2: Confiscation and Redemption of Gold Dore BarsGold Dore Bar No. 1 was confiscated under Section 111(d) of the Customs Act, 1962, read with Section 11(1) of the Foreign Trade (Development and Regulatory) Act, 1992, due to its purity exceeding the permissible limit of 95%. The importer was given the option to redeem Bar No. 1 for re-export on payment of a fine of Rs. 20,00,000. Gold Dore Bar No. 2, which was within the permissible purity limit, was also confiscated along with the tin package under Section 118(a) of the Customs Act, but the importer was allowed to redeem it for home consumption on payment of a fine of Rs. 2,00,000. Issue 3: Imposition of Personal PenaltyA personal penalty of Rs. 10,00,000 was imposed on the importer under Section 112(a) of the Customs Act, 1962, for alleged violations related to the import of the gold dore bars. Findings and Modifications:The Tribunal found that the purity of the gold dore bars could not be determined with 100% accuracy, and the discrepancies in purity were due to genuine human error by the supplier. For Bar No. 1, the Tribunal reduced the redemption fine from Rs. 20,00,000 to Rs. 50,000, noting that the undervaluation was only Rs. 86,541. For Bar No. 2, the Tribunal set aside the redemption fine and reduced the penalty from Rs. 10,00,000 to Rs. 10,000, acknowledging that there was no contravention regarding the purity limit. Conclusion:Redemption fine for Bar 1 reduced to Rs. 50,000. Redemption fine for Bar 2 set aside. Penalty under Section 112(a) reduced to Rs. 10,000. The impugned order was upheld with these modifications. (Order pronounced in the open court)
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