2014 (1) TMI 380 - AT - Customs

Confiscation of goods - Demand of differential duty - Imposition of redemption fine - Shortage in stock - Imposition of equivalent penalty - Held that - goods not seized cannot be confiscated and subsequently released on redemption fine. Redemption fine is possible only in respect of goods seized and confiscated irrespective of the facts that the goods are available at the time of adjudication for confiscation. Goods were not physically seized and therefore, the question of confiscation and subsequent release on imposition of redemption fine do not arise - imposing penalty upon the partner when the penalty has already been imposed upon the firm, does not have any legal support - Decided in favour of assessee.

Summary

Issues: Imposition of redemption fine, Personal penalties on partners

Imposition of Redemption Fine:
The appellants, a 100% EOU manufacturing polyester yarn, faced customs duty and penalties due to a shortage of 5,501 kgs of POY. The main contention was against the redemption fine imposed in lieu of confiscation. The Tribunal analyzed the case, noting the shortage and the removal of goods without duty payment. Referring to a similar case, the Tribunal emphasized that redemption fine applies only to seized goods liable for confiscation. As the goods were not physically seized, the Tribunal concluded that confiscation and subsequent release on redemption fine were not valid. The Tribunal held that goods not seized cannot be confiscated and released on redemption fine, setting aside the redemption fine as per the Order-in-Appeal.

Personal Penalties on Partners:
Regarding the imposition of personal penalties on the partners, the Tribunal cited a judgment of the Hon'ble High Court of Gujarat. The Court's ruling highlighted that a partnership firm and its partners are not separate excisable entities. Partners cannot be equated with firm employees. Once a firm is penalized, separate penalties on partners lack legal support. Therefore, the Tribunal concluded that imposing penalties on partners when the firm is already penalized is legally unsound. Consequently, the Tribunal set aside the penalty imposed on the partner in alignment with the Gujarat High Court's judgment. The Order-in-Appeal was modified accordingly, disposing of both appeals.

This comprehensive analysis of the judgment from the Appellate Tribunal CESTAT AHMEDABAD highlights the issues of redemption fine imposition and personal penalties on partners, delving into the legal reasoning and relevant precedents to reach a just decision.