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Issues: Application for waiver of pre-deposit of penalty under Section 111(d) read with Import Control Order 1955 and Import and Export Control Act, 1947. Calculation of penalty amount, validity of Registration Certificate, confiscation of goods, justification of penalty under Section 112 of the Customs Act, 1962.
In the case, the applicants sought a waiver of the penalty of Rs. 10 lakhs imposed for contravention under Section 111(d) read with Import Control Order 1955 and Import and Export Control Act, 1947. The adjudicating authority found that the applicants imported second-hand machines under fictitious/non-existent firms, failing to comply with the requirement of import by actual user. The authority confiscated the goods and imposed the penalty due to the absence of a valid Registration Certificate and lack of manufacturing activities under the given name and address. The applicants argued that they held a valid Registration Certificate at the time of shipment and arrival of the goods, emphasizing that the Customs authorities should not question their ability to use the imported items based on the license. They also contested the valuation of the goods, stating that the penalty was wrongly calculated based on the value of three consignments instead of the disputed consignment alone. The applicants requested a waiver of pre-deposit, highlighting the absence of a specific sub-section of Section 112 in the show cause notice and the lack of reference to Section 112 in the impugned order. The Departmental Representative pointed out the fictitious nature of the applicant firm, as evidenced by the lack of activity related to the imported machinery at the provided address. The applicants failed to respond to official summons, indicating evasion of authorities. Regarding the validity of the Registration Certificate, it was mentioned that the certificate was canceled following inquiries by the Commissioner of Industries, indicating its invalidity at the time of the order. Justification for the penalty was based on Section 112 of the Customs Act, 1962, allowing penalties up to five times the value of the goods. Despite the absence of a specific sub-clause reference in the notice, it was argued that the penalty fell within the permissible range based on the value of the goods. The Tribunal found that the applicants did not establish a strong prima facie case on merits, necessitating detailed examination during the final hearing. However, considering the value of the disputed goods to be Rs. 2,86,401.50 FOB, the Tribunal directed the applicants to deposit Rs. 3 lakhs as penalty within 8 weeks. Upon such deposit, the remaining penalty would be waived, and its recovery stayed pending appeal disposal. Failure to comply would result in the dismissal of the appeal without further notice. The matter was scheduled to be reviewed on June 10, 1992.
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