2023 (12) TMI 323 - AT - Customs

Imposition of redemption fine and penalty - import of Kiwi Fruits which was stated to be of Chile Origin - goods were undervalued - enhancement if value - appellant argued that the impugned order is passed with much delay and is therefore to be considered as non-est in law - HELD THAT - In para-9 of the impugned order the Commissioner (Appeals) has noted that there is no margin of profit as the goods are ordered to be re-exported. Further, it is also to be seen that the appellant has incurred huge loss due to demurrage charges etc. as the goods have been ordered to be re-exported. The goods are of perishable nature. Since they are ordered to be re-exported, the redemption fine imposed is without any basis and requires to be set aside. In the decision relied by the learned counsel for appellant M/S. GOYAL TRADING CO., M/S. GULAB FIBRES, M/S. UNITEC INC. VERSUS COMMISSIONER OF CUSTOMS, NHAVA SHEVA-III 2023 (10) TMI 294 - CESTAT MUMBAI it is held that when the goods are allowed to be re-exported, no redemption fine is to be imposed - it is found that redemption fine of Rs.5 lakhs imposed under Section 125 for redeeming the goods for the purpose of re-export only requires to be set aside. Penalty imposed under Section 112 (a) as well as Section 114AA of the Customs Act, 1962 - HELD THAT - The facts bring out a case of forgery and manipulation of the documents submitted along with the Bills of Entry. It is the responsibility of the importer to furnish correct and genuine documents so as to assist in smooth clearance of the goods by the Customs Department - In the present case, the forgery and manipulation of the document is explicit and details are mentioned in the table in para 2.2. of the OIO. It is also noted that the Commissioner (Appeals) has observed that though the purchase was made on High Sea sale basis, there is room to doubt the bonafides of the importer - taking into consideration that the goods are being ordered to be re-exported, and also that the appellant has incurred huge demurrage charges, the penalty imposed under Section 112 (a) (i) can be reduced from Rs.5 lakhs to Rs.4,00,000 lakhs (Rupees Four lakhs only). So also, the penalty imposed under Section 114AA of the Act is reduced from Rs.10 lakhs to Rs.8,00,000/- (Rupees eight lakhs only). The impugned order is modified to the extent of setting aside redemption fine of Rs.5 lakhs without disturbing the order to re-export the goods. The penalty imposed under Section 112 (a) is reduced from Rs.5,00,000/- to Rs.4,00,000/-. Penalty imposed under Section 114AA is reduced from Rs.10,00,000/- to Rs.8,00,000/- - Appeal allowed in part.

Summary

Issues involved:
- Import of Kiwi Fruits with suspected origin discrepancy and undervaluation
- Forgery and manipulation of Phytosanitary certificates
- Confiscation and re-export order of imported goods
- Delay in passing the impugned order by Commissioner (Appeals)
- Reduction of redemption fine and penalties on appeal

Import of Kiwi Fruits with suspected origin discrepancy and undervaluation:
The appellant imported Kiwi Fruits stated to be of Chile origin, but an alert raised suspicion that the origin might be Iran. Examination revealed Iranian markings on the crates and pallets, along with forged Chile Phytosanitary Certificate. Further examination of other cargo showed similar forgery in Phytosanitary certificates. The imported goods were undervalued, leading to enhanced assessment during the examination.

Forgery and manipulation of Phytosanitary certificates:
The appellant submitted manipulated Phytosanitary certificates, indicating different origins and fruits than the actual cargo. The certificates were found to be forged and manipulated, affecting the clearance process and authenticity of the imported goods.

Confiscation and re-export order of imported goods:
After due process, the original authority ordered the confiscation of the imported Kiwi Fruits and imposed penalties on the importer. The Plant Protection Officer directed the deportation of the consignments due to forged details in the certificates. The appellant requested re-export but was subject to penalties and fines.

Delay in passing the impugned order by Commissioner (Appeals):
The appellant argued a delay in the Commissioner (Appeals) passing the order, causing hardship and loss due to deterioration of goods. However, the Department contended that there was no significant delay, and the order was passed within a reasonable timeframe after granting multiple opportunities for hearing.

Reduction of redemption fine and penalties on appeal:
The Commissioner (Appeals) reduced the redemption fine and penalties imposed on the appellant, considering factors like lack of profit margin, perishable nature of goods, and incurring demurrage charges. The Tribunal modified the impugned order, setting aside the redemption fine and reducing penalties under Section 112 (a) and Section 114AA of the Customs Act, 1962.