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2023 (10) TMI 830 - AT - CustomsThe impact of imposing penalty and purpose of reduced penalty not fulfilled - deterring the appellant from repeating the offence - Continued violation of policy conditions - Reduction of redemption fine and penalty imposed on the respondents - import of Prime hot rolled steel plates shotblasted/ coated with Zinc Silicate - revision of assessable value on account of Minimum Import Price fixed by DGFT - HELD THAT - In respect of the said items Notification No. 38/2015-20 dated 05.02.2016 places restriction in nature of the prescribed Minimum Import Price. The notification prohibits imports at price less than USD 643/MT for the impugned item by placing the minimum import price as condition of import. The appellants have imported the goods at USD 398/MT, practically half the price prescribed by DGFT by the aforesaid notification. The goods were, therefore, confiscated and offered for release on payment of redemption fine and penalty to the respondents. Initially the assessable value was also revised by the original adjudicating authority to the Minimum Import Price prescribed by the DGFT. However, in appeal the valuation at the declared import price was accepted by Commissioner (Appeals) and no appeal on that ground has been filed by revenue. The appellant has been regularly importing by violating the Minimum Import Price (MIP) condition prescribed by the DGFT. It is noticed that the original authorities have been imposing redemption fine roughly equal to the amount of differential duty demanded. However, the Tribunal in the earlier cases had reduced the redemption fine and personal penalty by 90%. The impugned order in the instance case has followed the earlier order of Tribunal and reduced the redemption fine and personal penalty by 90% relying on the Tribunal order in appellant s own case. It is noticed from the pattern of continuing violation that the redemption fine and penalty imposed earlier are not discouraging the repeat of offence. It is seen that the appellants continue to violate the import policy in respect of Minimum Import Price with impunity. The redemption fine imposed earlier has not deterred the appellant from violating the policy. The impugned order is set aside and the matter is remanded to the original adjudicating authority to go into the facts of the case and come up with proper quantification of fine and penalty which is adequate to deter the appellant from repeating the offence - Appeal allowed by way of remand.
Issues Involved:
1. Whether the reduction in redemption fine and penalty imposed on the respondent was justified. 2. Whether the assessable value of imported goods can be revised based on the Minimum Import Price (MIP) fixed by DGFT. 3. Whether the quantum of redemption fine and penalty should be sufficient to deter repeated violations of import policy. Summary: Issue 1: Reduction in Redemption Fine and Penalty The appeal was filed by the Revenue against the reduction in redemption fine and penalty imposed on the respondent by the Commissioner (Appeals). The Commissioner (Appeals) had reduced the redemption fine and penalty drastically on the lower side, relying on an earlier order of the Tribunal in the case of Crystal Granite & Marble Pvt. Ltd. The Revenue argued that the reduction was not justified as the goods were liable to confiscation and the respondents had deliberately violated the import policy. The Revenue contended that the redemption fine and penalty should neutralize any benefit that may accrue to the importer from such illegal importation, citing decisions from the Hon'ble High Court of Delhi, Supreme Court of India, and other High Courts. Issue 2: Revision of Assessable Value Based on MIP The original adjudicating authority had revised the assessable value of the goods based on the MIP and demanded Customs Duty on the revised price. However, the Commissioner (Appeals) concluded that the assessable value could not be revised on account of the MIP fixed by DGFT, relying on an earlier decision of the Tribunal. The Commissioner (Appeals) accepted the declared value of the goods and no appeal on this ground was filed by the Revenue. Issue 3: Quantum of Redemption Fine and Penalty The Tribunal observed that the key factor for determining the quantum of redemption fine is that it should discourage the importer from repeating the offence. The Tribunal noted that the appellant had repeatedly violated the Minimum Import Price (MIP) condition prescribed by the DGFT and that the redemption fine and penalty imposed earlier were not sufficient to deter the repeated violations. The Tribunal found that the earlier orders of the Tribunal had failed to take notice of the appellant being a repeat offender and the increasing severity of the offence. Therefore, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority to come up with a proper quantification of fine and penalty adequate to deter the appellant from repeating the offence. Conclusion: The appeal of the Revenue was allowed by way of remand to the original adjudicating authority to reassess the quantum of fine and penalty to adequately deter the appellant from future violations.
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