2018 (10) TMI 331 - AT - Customs

Redemption Fine and Penalty - import of used Clinical equipments - case of appellant is that they applied to the Government of India for ad hoc exemption with respect to the import of the goods in question which was pending with the Government of India and redemption fine and penalty was imposed without appreciating the facts and the law - Held that - When the Commissioner(Appeals) passed the impugned order at that time, the appellant could not produce ad hoc exemption which was pending with the Government of India and subsequently the said exemption was granted vide letter dt. 24/02/2011 which is on record. In view of the exemption granted by Government of India, the imposition of redemption fine and penalty is not warranted - redemption fine and penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Imposition of redemption fine and penalty without appreciating facts and law.
- Request for ad hoc exemption pending with the Government of India.
- Classification of imported goods as used clinical equipments falling under capital goods category.
- Grant of ad hoc exemption by the Government of India.
- Setting aside the imposition of redemption fine and penalty.

Analysis:

The appeal was directed against the order passed by the Commissioner of Customs (Appeals) reducing the redemption fine and penalty imposed on the appellant. The appellant, a registered charitable trust working for the upliftment of adivasis and weaker sections, imported a lot of used clinical equipments donated by a surgeon from Malaysia. The lower authority confiscated the goods but allowed redemption on payment of a fine and imposed a penalty. The appellant appealed, arguing that the redemption fine and penalty were unjust as they had applied for ad hoc exemption pending with the Government of India. The appellant also highlighted that the imported goods were second-hand capital goods, and an exemption was subsequently granted by the Government of India.

Upon hearing both sides and examining the records, the Tribunal found that the imported goods indeed qualified as capital goods under the Exim Policy. The Tribunal noted that the equipments were intended for the welfare of the weaker sections of society. It was observed that the appellant had initially been unable to produce the ad hoc exemption, which was later granted by the Government of India. Considering the exemption granted, the Tribunal concluded that the imposition of redemption fine and penalty was unwarranted. Consequently, the Tribunal set aside the imposition of redemption fine and penalty, allowing the appeal of the appellant and providing any consequential relief deemed necessary.

In the operative part of the order pronounced on 28/09/2018, the Tribunal ruled in favor of the appellant, emphasizing the significance of the ad hoc exemption granted by the Government of India in overturning the imposition of the redemption fine and penalty.