2024 (4) TMI 182 - AT - Customs

Seeking Permission to abandon the goods and remission of duty - Bills of Entry declaring the goods as Aluminium Alloy Ingots but shipment contained Stone Chips - Claim for re-credit duty, debited from Advance Authorisation Scrips - Abandoned the goods - confiscation - redemption fine - Penalty - HELD THAT - In the present case, the goods having been abandoned there is no situation of redeeming the goods. The Adjudicating Authority has ordered for confiscation of the goods only because the goods have been abandoned. In such situation, the goods are taken into possession by the Central Government and disposed of in accordance with law. The goods can be taken into possession only if confiscated. The Adjudicating Authority has ordered for confiscation only to facilitate the custody of goods to the Central Government. The Commissioner (Appeals) has misconceived the provisions under Customs Act, 1962, that as there is confiscation of goods, redemption fine has to be imposed. When the appellant has abandoned the goods, there is no requirement to give option to redeem the goods. When the goods are not being redeemed and abandoned, the goods have to taken custody by the Central Government. In such situation of confiscation, imposition of redemption fine does not arise. Again, even though Adjudicating Authority has imposed penalty of Rs.30,000/-, there is no finding rendered as to the offence committed by the importer. Instead, it has been categorically stated that no offence is committed by the importer. The appellant has paid the penalty and does not contest the same. So, the observation made by the Commissioner (Appeals) that since goods have been confiscated and penalty imposed, redemption fine has to be imposed is erroneous. Further, there is no appeal filed by the Department against the order of the Adjudicating Authority who refrained from imposing redemption fine. The Commissioner (Appeals) ought not to have imposed redemption fine in an appeal filed by the importer. Thus, the redemption fine of Rs.19 Lakhs imposed by the Commissioner (Appeals) is not justified and requires to be set aside, which I hereby do. Appellant has requested for re-credit of the duty - The appellant having not imported Aluminium Alloy Ingots is not liable to pay such duty. The appellant had placed order for Aluminium Alloy Ingots and they have not received the goods. However, the duty was debited in the Scrips. The appellant is therefore eligible for re-credit of duty that in the Advance Authorisation Scrips. The impugned order is modified to the extent of setting aside the redemption fine and also setting aside the order directing re-credit of duty applicable to Stone Chips. The appellant is eligible for re-credit of duty that has been debited and applicable to Aluminium Alloy Ingots. It is made clear that as the appellant has not contested the penalty, the same is not disturbed. The appeal is allowed in above terms with consequential reliefs, if any, as per law.

Summary

Issues involved:
1. Abandonment of consignment containing incorrect goods and imposition of redemption fine
2. Re-credit of duty in Advance Authorisation Scrips

Abandonment of consignment and redemption fine:
The appellant ordered 'Aluminium Alloy Ingots' but received Stone Chips instead. They sought to abandon the consignment u/s 23 of the Customs Act, 1962. The Adjudicating Authority found no offence committed and did not impose redemption fine. However, the Commissioner (Appeals) imposed a redemption fine of Rs.19 Lakhs, citing confiscation of goods. The Tribunal held that as the goods were abandoned, there was no need for redemption, and the confiscation was only for custody purposes. The Commissioner's decision to impose the redemption fine was deemed erroneous, and it was set aside.

Re-credit of duty in Advance Authorisation Scrips:
The appellant requested re-credit of duty debited from their Advance Authorisation Scrips, applicable to Aluminium Alloy Ingots. The Adjudicating Authority denied this, but the Commissioner (Appeals) allowed re-credit limited to duty for Stone Chips. The Tribunal noted that since the appellant did not receive the ordered goods, they were eligible for re-credit of duty applicable to Aluminium Alloy Ingots. The impugned order was modified to set aside the re-credit of duty for Stone Chips and allow re-credit for Aluminium Alloy Ingots. The penalty, which the appellant did not contest, remained unchanged. The appeal was allowed accordingly.