2009 (9) TMI 168 - HC - Customs

Import without licence - Whether CESTAT is right in partly setting aside the; Order-in-Original dated 28-8-2006 and reducing the redemption fine from Rs. 25,00,000/- to Rs. 5,00,000/- and also setting aside the personal penalty imposed upon the importer for various offences committed U/s. 111(d), (f) and (m) and U/s. 112(a) of the Customs Act, 1962? - Tribunal noted that if the respondent had applied for licnece, the D.G.F.T. would have granted the same. Secondly the yacht was for personal use of Respondent herein and in these circumstances, the tribunal reduced the amount of fine. - In our opinion, it cannot be said that the said finding and consequent reduction of redemption fine by the tribunal is without jurisdiction or discloses non application of mind. In our opinion, therefore, we find no reason to interfere with the order passed by the Tribunal in so far as redemption fine is concerned. But tribunal could not hve set aside penalty - we find that considering that the vessel was already within the Indian territorial waters when IGM had been granted and only import licence had not been asked for, there is a technical breach, ends of justice will be met if the penalty of Rs. 50,000/- is imposed. - the impugned order of the Tribunal to the extent of setting aside penalty is set aside

Summary

Issues:
1. Reduction of redemption fine from Rs. 25 lacs to Rs. 5 lacs.
2. Setting aside the penalty imposed on the importer for various offenses.

Analysis:
1. The High Court addressed the issue of the redemption fine reduction from Rs. 25 lacs to Rs. 5 lacs. The Tribunal had upheld the confiscation order for contravention of Section 111(bh) and reduced the fine considering the vessel was for personal use. The Court found the Tribunal's decision reasonable, stating that the imposition of the fine is not mandatory and depends on the case's circumstances. The Court held that the Tribunal's reduction of the fine was not without jurisdiction or lack of application of mind, thus upholding the decision on the redemption fine.

2. The Court then examined the penalty issue. The Tribunal had set aside the penalty imposed on the importer for offenses under various sections of the Customs Act, 1962. The Court noted that the vessel was already within Indian territorial waters, and the breach occurred due to the lack of an import license despite the possibility of obtaining one. The Court found that there was a technical breach warranting a penalty not exceeding the value of the goods or Rs. 5,000, whichever is greater. Thus, the Court imposed a penalty of Rs. 50,000 considering the circumstances.

3. Consequently, the Court set aside the Tribunal's decision to waive the penalty and partially allowed the appeal by reducing the penalty from Rs. 5 lacs to Rs. 50,000. The Court directed the respondents to pay the penalty if not already paid and instructed the appellants to return any excess amount paid as per the law. The Court upheld the redemption fine payment and directed the appellants to refund any excess amount paid by the respondents.