2019 (1) TMI 668 - AT - Customs

Import of restricted item - rough marble blocks - import without any specific license - Valuation - rejection of declared value based on contemporaneous imports - confiscation - redemption fine - penalty - Held that - The fact is not under dispute that rough marble blocks imported by the appellant was restricted and permitted for import subject to observance of the import licensing procedures prescribed by the DGFT. In this case, the appellant had not followed any procedure laid down in the Notification dated 31.3.2010 read with the FTP 2009-2014. Thus, such imported goods was liable for confiscation and had appropriately been confiscated by the original authority. Redemption fine - penalty - Held that - The original authority has not considered the aspect of margin of profit expected to be earned in normal course of trade in respect of such imported consignment. Further, in respect of the same goods imported earlier by some other importer, viz., Guru Kripa Marbles, the Tribunal has reduced the quantum of redemption fine and penalty, holding that the same should be calculated based on the formula laid down by Section 125 of the Act - the prayer of the appellant can be considered to the limited extent of reduction of the quantum of fine and penalty imposed on it. The impugned order is modified, to the extent of reducing the quantum of redemption fine and penalty to ₹ 14,00,000/- and ₹ 3,50,000/- respectively - appeal disposed off.

Summary

Issues:
1. Import of rough marble blocks without specific license.
2. Redetermination of value under Rule 5 of Customs Valuation Rules, 2007.
3. Confiscation of goods and imposition of penalty.
4. Quantum of redemption fine and penalty imposed.

Analysis:

Issue 1: Import of rough marble blocks without specific license
The appellant imported rough marble blocks without fulfilling the import licensing procedures as per DGFT Notification and Foreign Trade Policy. The department observed the absence of a specific license for the imported goods, leading to the initiation of show cause proceedings. The appellant did not contest the redetermination of value under Rule 5 of the Customs Valuation Rules, acknowledging the procedural lapse in importing the goods without the required license.

Issue 2: Redetermination of value under Rule 5 of Customs Valuation Rules, 2007
The impugned order redetermined the value of the imported goods due to discrepancies in the declared unit price compared to the contemporaneous import price. The original authority adjusted the value to &8377; 69,90,427/- and confiscated the goods under relevant sections of the Customs Act, 1962. The appellant did not dispute the redetermined value, focusing instead on contesting the quantum of redemption fine and penalty imposed.

Issue 3: Confiscation of goods and imposition of penalty
The department confiscated the goods under Sections 111(d) and 111(m) of the Customs Act, 1962, and imposed a penalty of &8377; 7,00,000/- on the appellant. The impugned order also provided the option to redeem the goods upon payment of a redemption fine. The appellant, while accepting the redetermined value and penalties, sought a reduction in the quantum of redemption fine and penalty based on precedents and judgments supporting such reductions in similar cases.

Issue 4: Quantum of redemption fine and penalty imposed
The Tribunal considered the appellant's plea for reducing the quantum of redemption fine and penalty, noting the lack of consideration of expected profit margins in the impugned order. Citing previous cases where the Tribunal had reduced fines and penalties based on specific formulas, the Tribunal agreed to modify the impugned order. The quantum of redemption fine and penalty was reduced to &8377; 14,00,000/- and &8377; 3,50,000/-, respectively, taking into account the circumstances of the case and the principles applied in previous judgments.

This comprehensive analysis of the judgment highlights the key issues addressed by the Tribunal concerning the import of rough marble blocks, redetermination of value, confiscation of goods, and the imposition of fines and penalties, culminating in a decision to reduce the quantum of redemption fine and penalty imposed on the appellant.