2023 (12) TMI 262 - AT - Customs

Seeking permission for re-export of goods on imposition of redemption fine and penalty - quantum of penalty - inadvertent import of battery scrap which was declared at the time of import as Cast Iron Scrap - restricted goods or not - HELD THAT - Considered, the flow of the decisions in the recent past on redemption fine on re-export is in favor of assessee based on the proposition that on reexport no import takes place on the soil of India and therefore the goods are not redeemed within the territory of India and therefore the redemption fine no more remains imposable. This Court is inclined to agree with the proposition of the learned advocate based on the above quoted decisions and is inclined to do away with the redemption fine of Rs. 3 Lakhs imposed at the time of re-export of goods. However, considering the nature of offending goods which are covered under Hazardous Substances Act, the imposition of fine of Rs. 1 Lakhs appears proper. Even if it is conceded that Section 112(a) requires mens rea, it is trite law that quoting improper Section cannot be reason not to impose penalty when residuary penal Section like Section 117 exist in the legislation, which does not require mens rea . Considering the offending nature of the goods which can create environment perils for Indians, the wrong quoting of section by the department should not come in the way of imposition of penalty, the same is found reasonable and is maintained, in the facts and circumstances of this matter. Appeal allowed.

Summary

Issues:
The judgment pertains to the inadvertent import of battery scrap mis-declared as Cast Iron Scrap. The issues involved include the imposition of redemption fine, penalty, and the nature of the goods being hazardous.

Imposition of Redemption Fine:
The appellant-importers sought extinction or reduction of the redemption fine based on various case laws. The Tribunal considered recent decisions favoring the assessee's position that on re-export, no import takes place on Indian soil, thus the redemption fine is not imposable. Consequently, the redemption fine of Rs. 3 Lakhs imposed during re-export was waived. However, due to the hazardous nature of the goods, a fine of Rs. 1 Lakh was deemed appropriate.

Imposition of Penalty:
The appellant argued against the imposition of penalty citing the absence of mens rea at this stage. They relied on precedents to support their position that no penalty should be imposed under Section 112(a). Additionally, they emphasized that on re-export, no redemption fine should be imposed. The Tribunal acknowledged the argument but maintained the penalty of Rs. 1 Lakh due to the hazardous nature of the goods, despite the incorrect citation of the penal section by the department.

Nature of Goods and Justification for Penalty:
The department opposed the appellant's plea, justifying the imposition of redemption fine and penalty due to the hazardous and restricted nature of the goods under Foreign Trading Policy and Regulations. Despite the absence of mens rea, the Tribunal upheld the penalty considering the potential environmental risks posed by the goods. The penalty of Rs. 1 Lakh was deemed reasonable and maintained based on the circumstances of the case.

Conclusion:
The Tribunal allowed the appeal, ruling in favor of the appellant by waiving the redemption fine of Rs. 3 Lakhs but maintaining the penalty of Rs. 1 Lakh due to the hazardous nature of the goods and the potential environmental hazards they posed.