2017 (1) TMI 407 - AT - Customs

Quantum of redemption fine - against the profit margin of ₹ 25.02 lakhs redemption fine imposed only to the tune of ₹ 4 lakhs - is the quantum of fine is very low or is the quantum justified? - Held that - the Commissioner has admitted that there is a margin of profit available to the importer is ₹ 25.02 lakhs and also held that the same should be wiped out, accordingly he imposed the penalty of ₹ 21 lakhs and redemption fine of ₹ 4 lakhs. I observed from the grounds of appeal that the Revenue has not questioned the penalty of ₹ 21 lakhs imposed by the Commissioner. Therefore the Commissioner has given a proper justification for imposing ₹ 4 lakhs redemption fine as well as the penalty of ₹ 21 lakhs - fine justified - appeal disposed off - decided against Revenue.

Summary

Issues:
Revenue's appeal seeking enhancement of redemption fine imposed on importer for undervaluing Rough Marble Blocks.

Analysis:
The Revenue filed an appeal seeking an increase in the redemption fine imposed on the importer for allegedly undervaluing Rough Marble Blocks. The adjudicating authority had imposed a redemption fine of &8377; 4 lakhs and a penalty of &8377; 21 lakhs against a profit margin of &8377; 25.02 lakhs. The Revenue contended that the redemption fine should be enhanced to neutralize the margin of profit.

The Revenue argued that the margin of profit of &8377; 25 lakhs was not disputed, and the fine of &8377; 4 lakhs imposed by the Commissioner was too low. They sought an increase in the redemption fine to offset the profit margin effectively.

On the other hand, the respondent's counsel highlighted that the Commissioner had already neutralized the profit margin by imposing a penalty of &8377; 21 lakhs and a redemption fine of &8377; 4 lakhs. They argued that since the profit margin of &8377; 25.02 lakhs had been addressed by the penalties imposed, the Revenue's appeal was not warranted.

Upon careful consideration of both sides' submissions, the Member (Judicial) found that the Commissioner had justified the redemption fine of &8377; 4 lakhs in light of the profit margin available to the importer. The Commissioner had explicitly stated that the profit margin needed to be wiped out through penalties. The Member noted that the Revenue did not challenge the penalty of &8377; 21 lakhs imposed by the Commissioner. Therefore, it was concluded that the Commissioner's decision to impose a redemption fine of &8377; 4 lakhs was justified, and there was no flaw in the impugned order. Consequently, the Revenue's appeal was dismissed, upholding the impugned order.

In conclusion, the judgment upheld the imposition of the redemption fine and penalty on the importer for undervaluing Rough Marble Blocks, as the Commissioner had adequately addressed the profit margin in the penalties imposed.