2009 (8) TMI 595 - AT - Customs

Redemption fine- Seizure of unmenifested wooden box containing High Pressure water blaster. Redemption fine of Rs. 25000/- imposed on goods and Rs. 50,000/- imposed on vessel along with penalties. Department s plea that redemption fine not in tune with Board Instruction No. 8/62/68/Cus.-VII, dated 12.03.1970, that goods not basic items and that there was no mention of profit margin. Held that- for goods of value Rs. 1.03 lakhs, redemption fine and penalty of Rs. 1.8 lakh already imposed. Act of smuggling in terms of section 11 and 111 of Custom Act, 1962 governed by specific legal provisions of Chapter XIV. Assessing authority being quasi judicial authority to act independently. Instructions/guidelines not mandate for being obeyed in each assessment. No infirmity in impugned order rejecting department s appeal.

Summary

Issues:
Appeal for enhancement of redemption fine imposed by lower authorities.

Analysis:
1. The case involved an appeal filed by the revenue seeking an increase in the redemption fine imposed on goods and vessel owned by the respondent. The goods, a "High Pressure Water Blaster," valued at Rs. 1.03 lakhs CIF and Rs. 2.06 lakhs LMV, were seized by Port and Customs authorities as they were unmanifested. The investigation revealed that the goods were liable for confiscation, leading to a redemption fine of Rs. 25,000/- on the goods and Rs. 50,000/- on the vessel along with penalties.

2. The department contended before the Commissioner (Appeals) that the redemption fine imposed was not justified as the goods did not fall under basic items, questioning the valuation methodology and lack of specific details in the assessment. The appellate authority rejected the appeal, prompting the revenue to appeal further.

3. During the appeal hearing, the revenue reiterated their grounds, emphasizing discrepancies in valuation and procedural irregularities. However, the respondent argued that the redemption fine and penalty already imposed were excessive, amounting to almost 175% of the goods' value. They cited a legal precedent highlighting the independence of assessing authorities in making determinations under the Customs Act, 1962.

4. The presiding Member analyzed the case, noting that the redemption fine and penalty already paid by the respondent exceeded the value of the goods. Referring to legal provisions and a Supreme Court ruling emphasizing the quasi-judicial powers of assessing authorities, the Member upheld the impugned order. It was concluded that the standing order in question was meant for the smooth functioning of the department and did not mandate strict compliance in every assessment.

5. Consequently, the appeal filed by the revenue for the enhancement of the redemption fine was rejected, and the impugned order was upheld based on the specific legal provisions and precedents cited during the proceedings.