1998 (7) TMI 253 - AT - Customs

Summary

Issues Involved:
1. Imposition of Redemption Fine and Penalty for import without a valid license.
2. Basis for calculating Redemption Fine.
3. Consideration of demurrage and delay in the appellate process.
4. Precedents and established practices for determining Redemption Fine.

Summary:

1. Imposition of Redemption Fine and Penalty for import without a valid license:
The appellants challenged the Order-in-Original No. 1/98, dated 17-4-1998, which imposed a Redemption Fine (R.F.) of Rs. 11,35,430/- and a Penalty of Rs. 2,32,670/-. The Order-in-Appeal reduced these amounts to Rs. 9,11,250/- and Rs. 1,00,000/- respectively. The appellants contended that the fine and penalty were arbitrary and unjust.

2. Basis for calculating Redemption Fine:
The appellants argued that the R.F. should be based on the Margin of Profit (MOP) and not on the market price. They cited several Tribunal decisions where 75% of the CIF value was used as the basis for R.F. The Tribunal noted that the impugned Order-in-Appeal imposed a 75% R.F. on the market price, resulting in an effective R.F. of 200% of the CIF value, which was deemed neither logically nor precedentially correct.

3. Consideration of demurrage and delay in the appellate process:
The appellants highlighted the undue delay of 10 months in passing the impugned order, causing additional demurrage costs. The Tribunal acknowledged the delay and the ongoing demurrage costs, opting to exercise discretion to avoid further delays in justice.

4. Precedents and established practices for determining Redemption Fine:
The Tribunal considered the established formula for MOP, which was calculated to be 123.87% of the CIF value. Taking into account the demurrage and other charges, the Tribunal found a 75% MOP (of CIF value) to be just and fair, aligning with precedents. Consequently, the Tribunal ordered the goods to be offered for redemption on a fine of Rs. 3,50,000/- and reduced the penalty to Rs. 35,000/-.

Conclusion:
The impugned Order-in-Appeal was modified, and the appeal succeeded partially. The Tribunal set the Redemption Fine at Rs. 3,50,000/- and the penalty at Rs. 35,000/-.