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2023 (7) TMI 783 - HC - CustomsConfiscation - Setting aside the redemption fine imposed under section 125 of the Customs Act, 1962 - excess found goods cleared under bond - penalty under section 112(a) of the Customs Act, 1962 - import of parts of Aircraft - recovery of customs duty on excess/shortage goods. Redemption fine - HELD THAT - The sequitur of not challenging the setting aside order of confiscation of goods brings about a result of the Revenue taking a position that provisions of section 111 of the Act dealing with confiscation are not applicable to the case of the respondent/ assessee. If that be so, the question of redemption fine in lieu of confiscation would not arise. The provisions of Section 125 would get attracted only if the goods are confiscated. The appellant/revenue is not correct in stating that the Tribunal has confirmed the confiscation since in para 4.7 of its order, the Tribunal has expressly stated that they are setting aside confiscation order. Since in the instant case, the appellant/ revenue has accepted the setting aside order of confiscation of goods, question of applying provisions of Section 125 dealing with the redemption fine which are in lieu of confiscation would not arise and therefore, on this ground itself, question of setting aside redemption fine as raised by the appellant revenue does not arise. This Court in the decision in cases of COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS FINESSE CREATION INC. 2009 (8) TMI 115 - BOMBAY HIGH COURT , COMMISSIONER OF CUSTOMS (IMPORT) VERSUS M/S RISHI SHIP BREAKERS 2009 (9) TMI 974 - BOMBAY HIGH COURT and COMMISSIONER OF CUSTOMS (EXPORTS) VERSUS SUDARSHAN CARGO PVT. LTD. 2010 (7) TMI 325 - BOMBAY HIGH COURT , have held that if the goods are not available for confiscation there cannot be any redemption fine. The Supreme Court has dismissed the SLP of the revenue in the case of COMMISSIONER VERSUS FINESSE CREATION INC 2010 (5) TMI 804 - SC ORDER - In the instant case, admittedly the appellant/revenue could not find actual goods for confiscation and therefore, the order setting aside the redemption fine is in consistence with the decisions of this Court. Penalty u/s 112(a) of CA - HELD THAT - The appellant/revenue is wrong in saying in that the Tribunal has confirmed the confiscation. Therefore, the appellant/revenue has accepted that the goods were not required to be confiscated. If that be so, the penalty under Section 112(a) is in relation to such goods liable for confiscation. The confiscation order having set aside, consequently the penalty under Section 112 (a) is also consequently not applicable. Even otherwise, the Tribunal in paragraph 4.9 of its order has deleted penalty on the ground that looking into the enormity of the inventory managed and handled by the respondent/assessee and the fact that the respondent/assessee is a Public Sector Undertaking, the order imposing penalty is not justified. The Tribunal also took note of the fact that the entire case is made on the basis of the report prepared by the external auditors as part of internal assessment and control mechanism adopted by the respondent/ assessee to verify and manage the inventory of imported goods and therefore, there is no deliberate act on the part of the assessee to evade the duty - these are the findings of facts on the basis of which the penalty has been set aside and the same being not alleged as perverse, no question of law would arise. No substantial question of law arises for consideration of this Court - Appeal of Revenue dismissed.
Issues Involved:
1. Redemption fine imposed under Section 125 of the Customs Act. 2. Penalty under Section 112(a) of the Customs Act. 3. Whether the Tribunal passed a reasoned order to set aside the fine and penalty. Summary: Redemption Fine under Section 125: The appellant/revenue questioned whether the CESTAT was correct in setting aside the redemption fine on excess found goods cleared under bond. The Tribunal had set aside the confiscation of goods, and this finding was not challenged by the appellant, implying that the provisions of Section 111 of the Act dealing with confiscation were not applicable. Since the confiscation order was set aside, the question of redemption fine in lieu of confiscation did not arise. The Tribunal's finding that the goods were not seized or released provisionally against bond and bank guarantee was uncontroverted. The Court cited precedents that redemption fine cannot be imposed if goods are not available for confiscation. Thus, the Tribunal's decision to set aside the redemption fine was upheld. Penalty under Section 112(a): The appellant/revenue contended that the Tribunal erred in setting aside the penalty despite the adjudicating authority's findings. However, the Tribunal had set aside the confiscation order, and this was not challenged, meaning the goods were not liable for confiscation. Consequently, the penalty under Section 112(a) was not applicable. The Tribunal also noted the enormity of the inventory managed by the respondent, a Public Sector Undertaking, and found no deliberate act to evade duty. These findings of fact were not alleged as perverse, and thus, no question of law arose. Reasoned Order by Tribunal: The Tribunal had provided detailed reasoning in its order, setting aside both the redemption fine and the penalty based on factual findings and legal precedents. The High Court found no substantial question of law for consideration and dismissed the appeal of the revenue.
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