2016 (3) TMI 554 - AT - Customs

Reduction of Redemption fine and penalty imposed - In lieu of confiscation - Appellant accepted enhancement of value and Pre-shipment inspection certificate produced was not in consonance - Held that - the importer have attempted to comply with the statutory conditions prescribed in the handbook of procedures under the Foreign Trade Policy regarding import of scraps, though the certificate produced, as a pre-shipment inspection certificate, was not accepted by the department and also by the Adjudicating Authority for the sole reason that the name had not been listed in the appendix 28. It appears that while the Head Office was recognized, the branch was not so recognized. Though there were violations of the Foreign Trade Policy read with Handbook of Procedures, the goods are liable to confiscation in view of section 111(d) of the Customs Act, 1962 and levy of penalty is also justified but as the redemption fine and the penalty imposed are on the higher side the fine in lieu of confiscation imposed are reduced from ₹ 5,09,000/- to ₹ 50,000/- and penalty penalty from ₹ 1,30,000/- to ₹ 30,000/-. - Decided in favour of appellant

Summary

Issues:
1. Valuation of imported goods
2. Compliance with statutory conditions for import
3. Confiscation of goods and imposition of penalties

Valuation of imported goods:
The appellant imported goods declared as Re-Rollable Scrap at a unit price of EURO 210/- per metric ton (C&F). However, the revenue found this value incorrect and determined it at U.S $ 290 per Metric Ton (C&F) based on contemporaneous import prices. The appellant accepted this revised value but sought a reduction in the redemption fine and penalties imposed. The Tribunal acknowledged the revenue's valuation adjustment but considered the appellant's plea for reducing the fine and penalties due to compliance efforts. The Tribunal reduced the fine from Rs. 5,09,000 to Rs. 50,000 and the penalty from Rs. 1,30,000 to Rs. 30,000.

Compliance with statutory conditions for import:
The appellant attempted to comply with statutory conditions under the Foreign Trade Policy for importing scraps, despite the pre-shipment inspection certificate issued by M/s Bureau Veritas, Paris, not being accepted by the Adjudicating Authority. The certificate was rejected because the place of loading, Conarkry, was not listed in Appendix 28. While the Head Office of M/s Bureau Veritas was recognized, the branch was not. The Tribunal noted violations of the Foreign Trade Policy and Handbook of Procedures, making the goods liable for confiscation under section 111(d) of the Customs Act, 1962. The imposition of penalties was deemed justified due to these violations.

Confiscation of goods and imposition of penalties:
Although the goods were liable for confiscation and penalties due to violations of statutory conditions, the Tribunal considered the partial compliance by the appellant. Consequently, the Tribunal found the redemption fine and penalties imposed to be excessive. Taking into account the circumstances, the Tribunal reduced the fine in lieu of confiscation from Rs. 5,09,000 to Rs. 50,000 and the penalty from Rs. 1,30,000 to Rs. 30,000.