2024 (1) TMI 256 - AT - Customs

Prayer for setting aside of imposition of redemption fine and penalty - over valued export goods - GST registration of the supplier is suspended - whether supplier is non-existent and no enquiry was conducted at the end of the supplier - HELD THAT - As the supplier of the goods is issued invoices to the appellant paying GST and market survey was not done in proper manner, in that circumstances the impugned order is not sustainable and is accordingly set aside. In that circumstances, the goods are not liable for confiscation, accordingly, no redemption fine and penalty can be imposed upon the appellant. Appeal allowed.

Summary

Issues involved: Appeal against imposition of redemption fine and penalty on the appellant.

Summary:
The appellant, an exporter of readymade garments, filed export documents with the department, which led to allegations of heavy overvaluation of goods. Investigations revealed that the GST registration of the supplier of the goods was suspended, and a market survey was conducted without the appellant's representative present. The department proposed confiscation of goods along with redemption fine and penalty. The appellant, not having filed the Shipping Bill, took back the goods after paying redemption fine and penalty under protest. The Commissioner (Appeals) upheld the imposition of redemption fine and penalty, leading to the current appeal.

The appellant argued that the suspension of the supplier's GST registration did not render the supplier non-existent, and no investigation was conducted at the supplier's end to verify GST payment. They also contested the market survey conducted in their absence, stating that the quality and quantity of goods surveyed were not specified. The appellant contended that the goods should not be liable for confiscation, hence no redemption fine or penalty should be imposed.

On the other hand, the authorized representative supported the impugned order, citing the acceptance of the market survey by the appellant and the suspension of the supplier's GST registration as justifications for the redemption fine and penalty.

After hearing both sides, the tribunal found that the suspension of the supplier's GST registration did not prove the supplier's non-existence, and the market survey conducted without the appellant's representative violated natural justice principles. Consequently, the tribunal set aside the impugned order, ruling that the goods were not liable for confiscation, and no redemption fine or penalty could be imposed on the appellant.

Therefore, the appeal was allowed with consequential relief.