2024 (1) TMI 193 - AT - Customs

Redemption Fine - penalty - rejection of declared value under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - HELD THAT - It is the settled position of law that the imposition of redemption fine cannot be disproportionate or arbitrary and, in any case, the same cannot exceed the market value of the product in question itself less the duty payable. Hence, it is clear that the quantum of levy insofar as redemption fine is concerned is just the discretion. On considering the impugned order, the adjudicating authority s logic has been clearly defied when the first appellate authority has felt it proper to reduce both the redemption fine and penalty, which is not challenged by the adjudicating authority/Revenue. Having reduced the redemption fine, the first appellate authority should have taken note of the provisions which prescribe the guidelines insofar as the levy of redemption fine is concerned. The Order-in-Original is passed in 2014 and hence, it is found unnecessary to remand the matter back, for the reason that there is no challenge to the valuation, rather the challenge is only to redemption fine and penalty - the ends of justice would be met if the redemption fine is pegged at Rs.3,00,000/-. Penalty - HELD THAT - The action of the appellant in shooting the letter dated 26.02.2014 before the adjudicating authority itself is an indication, which prompted the adjudicating authority to pass the Order-in-Original assuming that the import, primarily, was improper. The appeal is partly allowed. The redemption fine alone is reduced.

Summary

Issues involved:
The issues involved in the judgment are the rejection of declared value of imported goods, re-determination of value under Customs Valuation Rules, confiscation of goods under Customs Act, imposition of redemption fine and penalty, acceptance of enhanced value by the appellant, and reduction of redemption fine and penalty by the first appellate authority.

Rejection of Declared Value and Re-Determination:
The appellant filed a Bill-of-Entry for used jute bags, but the Revenue entertained doubts regarding the declared value, leading to re-determination under Customs Valuation Rules. The goods were alleged to be restricted for import, resulting in confiscation under the Customs Act. The appellant accepted the proposed re-determination without a Show Cause Notice. The original authority rejected the declared value, re-determined it, and ordered confiscation of the goods along with a redemption fine and penalty. The first appellate authority upheld the decision but reduced the quantum of redemption fine and penalty.

Grounds of Appeal:
The appellant challenged the first appellate authority's order, arguing that the approach was contrary to law and the facts of the case. They contended that the self-assessment was correct, and re-assessment was unsustainable. The appellant's import of used jute bags was deemed improper under the Foreign Trade Policy, leading to confiscation and penalty. The appellant's waiver of a Show Cause Notice was highlighted, questioning the adjudication process. The imposition of redemption fine without ascertaining the market value was deemed unlawful.

Contentions and Decision:
The Assistant Commissioner supported the lower authorities, emphasizing the violation of Import-Export Policy and the doubt regarding the true value of the goods. The appellant's acceptance of the enhanced value and waiver of a detailed examination were noted. The Tribunal found that the appellant did not challenge the findings regarding the improper import of goods. The Tribunal addressed the redemption fine and penalty, emphasizing that the levy should not exceed the market value of the product. The first appellate authority's reduction of the redemption fine was upheld, considering the circumstances of the case. The penalty amount was sustained as the appellant did not challenge the findings of improper import.

Conclusion:
The Tribunal partly allowed the appeal, reducing the redemption fine while sustaining the penalty amount. The decision was based on the principles of proportionality and adherence to legal guidelines. The judgment aimed to ensure justice based on the specific facts and challenges raised in the case.