2017 (10) TMI 765 - AT - Customs

Confiscation - Redemption fine - penalty - amusement park equipments like crazy cars mini disco roller coaster etc. under EPCG scheme - the goods appeared to be used one - since the Revenue has not produced any evidence which shows that there is a guilty mind on the part of the appellant to import the second hand goods therefore the imposition of penalty is not warranted in the facts and circumstances of this case penalty set aside - redemption fine also reduced to 1 lakh - Appeal allowed in part.

Summary

Issues:
1. Imposition of fine and penalty under Sections 125(1) and 112(a) of the Customs Act, 1962.
2. Allegation of importing used goods under EPCG scheme.
3. Consideration of redemption fine and penalty.
4. Applicability of precedents in determining liability.

Detailed Analysis:
1. The appeal challenged an order imposing a fine of ?5 lakhs under Section 125(1) and a penalty of ?50,000 under Section 112(a) of the Customs Act, 1962. The appellant imported amusement park equipment under the EPCG scheme, but upon examination, the goods appeared used, contrary to the EPCG license for new items. The appellant requested re-export due to the supplier's error in sending used goods. The appellant contended that no deliberate violation occurred and relied on precedents like Hindustan Steel Ltd. v. State of Orissa [1978(2) ELT (J159) (SC)] to argue against the penalty.

2. The appellant's argument was countered by the respondent, who maintained that misdeclaration in the Bill of Entry led to the violation of the EPCG license terms. Despite re-exporting the goods, the appellant was held liable for redemption fine and penalty due to the misdeclaration. Precedents like M.V. Marketing & Supplies [2004(178) ELT 1034 (Tri. Chennai)] were cited to support this position.

3. The Tribunal, after considering submissions and precedents, found that the appellant's cited cases were not directly applicable. However, the Tribunal noted that even if goods are re-exported, redemption fine and penalty can still be imposed under Sections 111 and 125 of the Customs Act, 1962. The fine of ?5 lakhs was reduced to ?1 lakh, considering the appellant's conduct. The penalty of ?50,000 was dropped due to the lack of evidence showing a guilty mind on the appellant's part.

4. The Tribunal's decision highlighted the importance of considering the conduct of the appellant in determining the redemption fine and penalty. While reducing the fine, the Tribunal emphasized that penalties should be imposed based on evidence of deliberate violation. The judgment clarified the distinction between cases and the necessity of assessing each situation individually to determine liability accurately.