2001 (1) TMI 686 - AT - Customs

Summary

Issues Involved:
1. Confiscation of goods u/s 111(m) and 111(o) of the Customs Act, 1962.
2. Imposition of redemption fine and personal penalty u/s 112(a) of the Customs Act.
3. Jurisdiction of the Commissioner to impose redemption fine and penalty when re-export is allowed.
4. Applicability of Section 23(2) of the Customs Act regarding relinquishment of title to goods.

Summary:

Issue 1: Confiscation of Goods u/s 111(m) and 111(o)
The Commissioner of Customs, Calcutta, confiscated the consignment imported by the appellants on the grounds that the goods were not as declared in the bills of entry and air waybill, invoking Section 111(m) and 111(o) of the Customs Act, 1962. The appellants were given the option to redeem the goods upon payment of a redemption fine of Rs. 5 crores and either clear the goods for home consumption upon payment of customs duty or re-ship the goods to the supplier without payment of customs duty. Additionally, a personal penalty of Rs. 3 crores was imposed u/s 112(a) of the Customs Act.

Issue 2: Imposition of Redemption Fine and Personal Penalty u/s 112(a)
The appellants argued that the Commissioner had no jurisdiction to impose any redemption fine or penalty when re-export of the goods was allowed. They cited several decisions, including Siemens Ltd. v. CC and HCL Hewlett Packard v. CC, to support their contention that no redemption fine could be imposed on goods allowed to be re-exported. They also contended that the Commissioner erred in law and facts by imposing the penalty, as there was no evidence that the appellants intended to misdeclare the goods or evade customs duty.

Issue 3: Jurisdiction of the Commissioner
The appellants argued that as per Section 125(1) of the Customs Act, 1962, no redemption fine could be imposed on imported goods allowed to be re-exported. They emphasized that the Commissioner had no jurisdiction to impose such fines or penalties, as the goods were not liable to be confiscated once allowed for re-export.

Issue 4: Applicability of Section 23(2)
The appellants contended that their decision to abandon the goods was not an afterthought but a legitimate action under Section 23(2) of the Customs Act, which allows the owner to relinquish title to the goods before an order for clearance for home consumption or warehousing is made. They argued that they had no prior knowledge that the goods did not conform to the order and acted promptly upon being informed by the DRI authorities.

Judgment:
The Tribunal held that the issue was squarely covered in favor of the appellants by various decisions of the Tribunal and the Hon'ble Supreme Court. Since the Commissioner had allowed the re-export of the goods, the imposition of redemption fine and penalty was not justified. The Tribunal set aside the redemption fine and penalty, allowing the re-export of the consignment without any redemption fine, penalty, or duty. The appeal was thus allowed in these terms.