2020 (3) TMI 766 - AT - Customs

Re-computation of the duty liability - Notification No. 65/88-Cus, dated 01.03.1988, which provides 40% effective rate of duty - Confiscation - redemption fine - penalty - HELD THAT - On going through order of the adjudicating authority, the earlier adjudication order was set aside and the matter was remanded back only for re-computation of duty liability in terms of Notification No. 65/88-Cus, dated 01.03.1988. As the said order has reached its finality, therefore, the adjudicating authority has no option to go beyond the direction of this Tribunal while remanding the matter to the adjudicating authority. The order of the confiscation of goods and imposing redemption fine of ₹ 65,00,000/- is against the directions of the order of this Tribunal, dated 03.09.2007 - the redemption fine imposed on the appellant by way of impugned order is set aside - appeal disposed off.

Summary

Issues:
- Re-computation of duty liability in terms of Notification No. 65/88-Cus, dated 01.03.1988
- Imposition of redemption fine on the appellant

Re-computation of Duty Liability:
The case involved an appellant, a diagnostic center, importing medical equipment and availing exemption from customs duty under Notification No. 64/88-Cus, dated 01.03.1988. However, upon investigation, it was proposed to deny the exemption, leading to a demand for duty payment and penalties. The matter was adjudicated, resulting in confirmation of confiscation of goods and imposition of penalties. The Tribunal, in an earlier round of litigation, remanded the case to the adjudicating authority for re-computation of duty liability in accordance with Notification No. 65/88-Cus, dated 01.03.1988, which provides for a 40% effective duty rate. In the subsequent proceedings, the duty liability was recalculated as per the Tribunal's directions, and a redemption fine of ?65.00 lakhs was imposed on the appellant. The appellant challenged this fine, leading to the current appeal.

Imposition of Redemption Fine:
During the appeal hearing, the appellant did not appear, and the matter had been pending since 2009. The respondent supported the imposition of the redemption fine, citing that the goods were liable for confiscation under section 111(o) of the Customs Act, 1962. However, the Tribunal noted that the earlier order had specifically remanded the case for re-computation of duty liability under Notification No. 65/88-Cus, dated 01.03.1988. As the previous order had attained finality, the adjudicating authority was bound by the Tribunal's directive and could not exceed its scope. Consequently, the Tribunal held that the redemption fine of ?65,00,000 was contrary to the Tribunal's directions from 03.09.2007. As a result, the redemption fine was set aside, while the rest of the order was upheld, leading to the disposal of the appeal.

This detailed analysis of the judgment highlights the issues of re-computation of duty liability and the imposition of a redemption fine, providing a comprehensive understanding of the legal proceedings and the Tribunal's decision in the case.