2017 (12) TMI 1458 - HC - Customs

100% EOU - Benefit of N/N. 13/1981 dated 9th February, 1981 - Misdeclaration of imported goods - Old and Used Diesel Car Engines - Old and Used Car Bonnets - redemption fine - penalty. Held that - the reasoning of the Tribunal cannot be faulted inasmuch as there was no factual verification of the market value. No attempt was made by the revenue to ascertain the local market value of the used engines and in absence of such attempt to obtain market value, the estimation of the local market value is suspect. There is no substance in Mr. Jetly s contention that additional evidence ought not to have been allowed. Once the department failed to object to admission of document and its contents, it was not open for the revenue to question the impugned order on the basis that the additional evidence ought not to have been allowed. Even otherwise, it is seen that the documents sought to be introduced were not new documents which were not available with the authorities below but were only produced before the Tribunal at the time of disposal of the appeals since they were already part of the documents filed before the authorities below. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Reduction of redemption fine by CESTAT.
2. Rejection of Local Market Value (LMV) by CESTAT.
3. Admission of additional evidence by CESTAT.

Issue-wise Detailed Analysis:

1. Reduction of Redemption Fine by CESTAT:
The appellant, Commissioner of Customs, challenged the reduction of the redemption fine from ?1.25 Crores to 10% of the CIF value by CESTAT. The Tribunal had reduced the redemption fine and penalty based on the CIF value of ?1,73,47,655/- as mentioned in the show cause notice. The Tribunal's decision to reduce the redemption fine was based on the factual findings and the documents presented, which showed that the imports were genuine and for bona fide use. The Tribunal considered the margin of profit and demurrage incurred by the importer, which justified the reduction in the redemption fine. The High Court upheld the Tribunal's decision, stating that the reduction in redemption fine and penalty is essentially a finding of fact and no question of law arises from it.

2. Rejection of Local Market Value (LMV) by CESTAT:
The appellant contended that the LMV of ?7.93 crores fixed by the Department was justified based on market inquiries. However, the Tribunal rejected this LMV, finding that the estimation was not based on any factual verification or market inquiry reports. The Tribunal noted that the LMV was arbitrarily computed without any attempt to ascertain the actual market value of the used engines. The High Court agreed with the Tribunal's reasoning, emphasizing that the LMV estimation was suspect due to the lack of factual verification. Consequently, the Tribunal's decision to reject the LMV and base the redemption fine and penalty on the CIF value was upheld.

3. Admission of Additional Evidence by CESTAT:
The appellant argued that the Tribunal erred in admitting additional evidence submitted by the importer at a belated stage. However, the High Court found that the additional evidence consisted of documents that existed when the impugned order of the Commissioner was passed and were vital for the disposal of the appeals. The Tribunal had allowed the additional evidence in the interest of justice, noting that the Department's representative did not object to the admission of these documents. The High Court held that the Tribunal's decision to admit additional evidence was justified and did not warrant interference.

Conclusion:
The High Court dismissed the appeal, finding no reason to interfere with the Tribunal's order. The Tribunal's decisions on the reduction of redemption fine, rejection of LMV, and admission of additional evidence were based on factual findings and justified under the circumstances. The appeal did not raise any substantial question of law, and thus, the Tribunal's order was upheld.