2017 (4) TMI 1118 - AT - Customs

Valuation - rejection of transaction value - adoption of market value - confiscation - redemption fine - penalty - Held that - In the matter of penalty, there is already considerable reduction from ₹ 4 lakhs to ₹ 50,000/-. Taking into account the various acts and omissions on the part of the exporter, penalty under section 114 ibid is definitely imposable on him and in any case, the quantum has been very generously reduced by the Commissioner (Appeals) - penalty of ₹ 50,000/- imposable. As regards redemption fine, we find that the same has also been reduced from ₹ 9,93,000/- to ₹ 1,50,000/- - Section 125 ibid in any case covers infractions not only in the case of importation but also exportation. As is evident from section 125(1) of the Act, the only conditionality given in the proviso to sub-section (1) is that such fine shall not exceed the market price of the goods confiscated. Discernibly, no divergence from these conditionalities is seen from the impugned order. The redemption fine of ₹ 1,50,000/-, in our view, would therefore meet the ends of justice in the matter and is upheld. Appeal dismissed - decided against appellant.

Summary

Issues:
Overvaluation of goods for export, Confiscation of goods, Redemption fine, Penalty imposition, Appeal against adjudication order.

Overvaluation of goods for export:
The dispute revolves around the overvaluation of goods intended for export under five shipping bills dated 13.7.2006. The adjudication rejected the declared value of the goods, confirming the market value at &8377; 9,93,000. The goods were confiscated under Customs Act, 1962, and FEMA, 1999, but redemption was allowed upon payment of a fine of &8377; 9,93,000. A penalty of &8377; 4 lakhs was also imposed under relevant sections of the Act. The appellants had previously appealed this decision, resulting in a remand to the adjudicating Commissioner for reassessment of the redemption fine and penalty. Upon re-adjudication, the fine was reduced to &8377; 1,50,000 and the penalty to &8377; 50,000. The appellants challenged this outcome before the Tribunal.

Confiscation of goods and Redemption fine:
During the hearing, the appellants argued that the goods had diminished in value due to being stored for over two years, indicating no profit margin. They contended that as the goods were being returned from the port to town, the redemption fine under section 125 was unjustifiable. Conversely, the respondent emphasized that section 125 allows for the imposition of a fine at the officer's discretion in lieu of confiscation. The Tribunal examined the reduction of the redemption fine from &8377; 9,93,000 to &8377; 1,50,000. Despite the appellant's argument against the imposition of redemption fine under section 125, the Tribunal held that the provision covers infractions in both importation and exportation. The Tribunal concluded that the reduced redemption fine of &8377; 1,50,000 served the interests of justice, finding no grounds for intervention.

Penalty Imposition:
Regarding the penalty, the Tribunal acknowledged the significant reduction from &8377; 4 lakhs to &8377; 50,000. Considering the exporter's actions and omissions, the Tribunal affirmed the imposition of a penalty under section 114 of the Act. The Tribunal found the reduced penalty amount to be appropriate, as determined by the Commissioner (Appeals). Consequently, the Tribunal declined to interfere with the penalty quantum set by the Commissioner, upholding the penalty imposition.

In conclusion, the Tribunal dismissed the appeal after considering the arguments presented by both parties, affirming the reduction in penalty and redemption fine while upholding the imposition of penalties and redemption fines in the case of overvaluation of goods for export.