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2023 (6) TMI 377 - AT - CustomsReduction in quantum of Redemption Fine and Penalty - import of Sri Lankan Areca Nuts - restricted goods or not - misdeclaration of goods - declared value being higher than the threshold limit as per notification No. 20/2015-2020 issued by the Department of Commerce - goods freely importable or not - HELD THAT - The impugned goods were freely importable and there is no allegation of misdeclaration of goods and there is no evidence on record to show that the appellant has acted with malafied intention to import substandard goods intentionally. It is a fact that on test, it was found that the goods are of substandard and is not fit for human consumption and therefore original authority as well as the appellate authority both allowed re-export of the same. As far as the demand of redemption fine and penalty is concerned, the Commissioner (Appeals) has rightly relied upon various decisions of the Tribunal involving similar circumstances of re-export of food items, after being denied NOC by FSSAI and took the lenient view and rightly reduce the fine and the penalty - reliance can be placed in the case of M/S. ROYAL IMPORTS EXPORTS VERSUS COMMISSIONER OF CUSTOMS TUTICORIN 2021 (3) TMI 937 - CESTAT CHENNAI . For reducing the penalty under Section 112 (a) (i), the Ld. Commissioner (Appeals) has relied upon the decisions in the case of COMMISSIONER OF CUSTOMS (EXPORT) CHENNAI-I VERSUS BANSAL INDUSTRIES 2006 (9) TMI 58 - HIGH COURT, MADRAS . The Ld. Commissioner (Appeals) has rightly observed that in the absence of malafide on the part of the appellant penalty is reduced to Rs. 50,000/-. There is no infirmity in the order passed by the Commissioner (Appeals) reducing the redemption fine under Section 125(1) of the Customs Act, 1962 to Rs. 1,00,000/- and penalty under section 112(a)(i) of the Customs Act, 1962 to Rs. 50,000/- - the impugned goods are lying on the port since 10.11.2020 but the customs authorities did not bother to comply with the order of the Ld. Commissioner (Appeals). It shows complete insensivity of the officers to the financial loss occurring to the respondent due to deterioration of goods, in addition to, it shows complete dereliction of duty on their part. The assessable value of the consignment was Rs. 49,24,504/- and the respondent has paid the duty of Rs. 3,52,439/- as recorded in the impugned order, moreover the respondent also paid Rs. 1,50,000/- towards redemption fine and penalty but the customs authorities below did not release the goods for re-export thereby allowing the goods to further deteriorate in quality and in addition incurring huge demurrage due to lapse of considerable time for no fault of the respondent. It is deemed appropriate to direct the Chief Commissioner of Customs, Delhi to hold necessary inquiry into the matter regarding the delay caused in not allowing the re-export of the goods and take appropriate action against the errant officials - the impugned goods are directed to be released immediately to the respondent for the purpose of re-export and refund the duty back to the respondent as observed by the Ld. Commissioner (Appeals) in the impugned order. The appeal of the revenue is dismissed.
Issues:
The issues involved in the judgment are the reduction of redemption fine and penalty by the Commissioner (Appeals) and the subsequent appeal filed by the Revenue against the same. Reduction of Redemption Fine: The appellant filed a stay petition seeking stay of the order reducing the redemption fine from Rs. 10.00 Lakhs to Rs. 1.00 Lakh and penalty from Rs. 2.00 Lakhs to Rs. 50,000/-. The appeal pertains to a consignment of 'Sri Lankan Areca Nuts' where the goods were found to be substandard and not fit for human consumption. The original authority confiscated the goods for being imported contrary to the prohibition imposed by FSSAI Act, 2006. The Commissioner (Appeals) reduced the redemption fine and penalty, allowing re-export of the consignment. The appellant argued that the reduction of redemption fine was not justified as it is calculated based on the landed cost of the goods. However, the Commissioner (Appeals) observed that the goods were freely importable, no misdeclaration was alleged, and the appellant may have suffered due to delays and deterioration of the goods. Reduction of Penalty: The Commissioner (Appeals) also reduced the penalty imposed under Section 112(a)(i) of the Customs Act, 1962 to Rs. 50,000/- citing the absence of malafide intention on the part of the appellant. The Commissioner relied on the case of M/s Bansal Industries for this reduction. Furthermore, the Commissioner noted that the appellant had paid the duty for the bill of entry and would be entitled to relief if the goods were ultimately re-exported. Judgment and Directions: The Tribunal upheld the order of the Commissioner (Appeals) reducing the redemption fine and penalty. It was observed that there was no infirmity in the Commissioner's decision considering the circumstances of the case. The Tribunal directed the Chief Commissioner of Customs, Delhi to inquire into the delay in allowing re-export of the goods and take appropriate action against the responsible officials. The impugned goods were ordered to be released immediately for re-export, and the duty was to be refunded to the appellant. Additionally, the appellant was to be given a detention certificate to claim waiver of detention/demurrage charges due to the negligence of customs officers. Conclusion: The appeal of the revenue was dismissed, and the order was pronounced on 07.06.2023. The Chief Commissioner of Customs, Delhi was to be informed of the decision for necessary action at their end.
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