2015 (9) TMI 1198 - HC - Customs

Seizure of goods - Imposition of redemption fine - Held that - Order in Original was passed on 1st April, 2005 after recording the statement under Section 108 of the Customs Act, 1962 and thereafter notice was issued and adequate opportunity of being heard was also given to this appellant. At length there is a discussion about the goods seized from the premises of this appellant in the Order in Original dated 1st April, 2005 and ultimately redemption fine was imposed of ₹ 3.00 Lacs and a penalty upon this appellant was imposed of ₹ 50000 - order passed by the Joint Commissioner of Customs dated 1st April, 2005 has also been taken in review under Section 129(d) of the Customs Act, 1962 by Commissioner of Customs, Patna and the direction has been given to the Joint Commissioner of Customs that if the seized goods are found to be in possession of this appellant in violation of Section 111 of the Customs Act, then custom duty ought to have been levied from this appellant and without demanding the custom duty, an order was passed by the Joint Commissioner of Custom and the Commissioner of Customs, Patna has further directed to prefer appeal against the Order in Original passed by the Joint Commissioner of Customs dated 1st April, 2005. - matter remanded back - Decided in favour of assessee.

Summary

Issues:
1) Appeal against order passed by CESTAT reducing redemption fine and maintaining penalty.
2) Seizure of items during search at appellant's premises.
3) Order in Original imposing redemption fine and penalty after recording statement.
4) Appeal before CESTAT and reduction of redemption fine.
5) Lack of explanation for certain seized goods.
6) Remand to CESTAT to decide on explanations provided by appellant.
7) Review of order by Commissioner of Customs and direction to levy custom duty.
8) Remand to CESTAT due to failure to consider detailed explanations by appellant.
9) Quashing of CESTAT order for arbitrary market value determination.
10) Disposal of Tax Appeal with directions for CESTAT hearing.

Analysis:
1) The appeal was filed against the CESTAT order reducing the redemption fine from Rs. 3.00 Lacs to Rs. 1.5 Lacs while maintaining the penalty at Rs. 50000. The Tax Appeal was preferred against this order for further consideration.

2) Numerous items were seized by the respondents during a search at the appellant's premises, who was involved in dealing with mobiles and electronic items. This seizure led to subsequent legal actions and penalties against the appellant.

3) An Order in Original was issued after recording the appellant's statement under Section 108 of the Customs Act, 1962. The order imposed a redemption fine of Rs. 3.00 Lacs and a penalty of Rs. 50000 on the appellant after a detailed discussion on the seized goods.

4) The appellant appealed this order before CESTAT, where the redemption fine was reduced without proper appreciation of certain aspects of the case. The penalty was maintained at Rs. 50000, leading to further legal complexities.

5) There were discrepancies in the explanations provided by the appellant regarding the seized goods. While some items had explanations, others did not, leading to arguments during the legal proceedings.

6) The court decided to remand the matter to CESTAT for a thorough examination of the explanations provided by the appellant, especially concerning several mobile phones with attached invoices.

7) The Commissioner of Customs reviewed the order and directed the Joint Commissioner to levy custom duty if the seized goods were found in violation of the Customs Act. Appeals were also directed against the Order in Original.

8) Due to the failure of CESTAT to consider the detailed explanations provided by the appellant, the court remanded the matter back for proper review and consideration.

9) The court quashed the CESTAT order for arbitrarily determining the market value of goods at Rs. 5.00 Lacs and reducing the redemption fine. The court emphasized the importance of considering the appellant's explanations in the original order.

10) The Tax Appeal was disposed of with directions for the appellant to appear before CESTAT for further proceedings, with a timeline set for the resolution of the appeal within six months.