2024 (2) TMI 1265 - AT - Customs

Undervaluation of imported goods - Confiscation of goods - redemption fine - penalty u/s 12 - HELD THAT - We observe in the present case that the immunity granted to the Appellant is under show cause notice No. DRI/HQ -CI/50D/Int-2/2018/CI/8935 dated 14.11.2019 does not ipso facto cover the show cause notice No. DRI/HQ CI/50D/Int-2/2018/CI-7806-7809 dated 04.10.2018. However taking into consideration the obligations discharged by the Appellant under the Settlement Commission s order, we are of the view that it would be only fair that a lenient view be adopted with regards to the quantum of fine and penalty imposed. Accordingly, in Appeal, the redemption fines of Rs. 12,00,000/-, Rs. 20,00,000/- and Rs. 7,50,000/- are reduced to Rs. 6,00,000/-, Rs. 10,00,000/- and Rs. 4,00,000/- respectively and in Appeal, penalty of Rs. 20,00,000/- is reduced to Rs. 5,00,000/- The impugned order is modified to the above extent. Appeals are partly allowed in above terms.

Summary

Issues involved:
The issues involved in the judgment are the confiscation of goods, redemption fine, and personal penalty under Section 112 of the Customs Act, 1962 for admitted undervaluation of imported goods.

Confiscation of Goods:
The appellants were engaged in importing food supplements from a US-based firm, where bogus invoices were generated to show lesser values of goods. The adjudicating authority held the goods liable for confiscation under Section 111(m) of the Customs Act, 1962. The appellants appealed against this decision, citing settlement with the Settlement Commission for a related show cause notice. The Tribunal observed that while the immunity granted did not directly cover the present show cause notice, considering the obligations fulfilled by the appellants under the Settlement Commission's order, a lenient view was adopted. Consequently, the redemption fines and penalties imposed were reduced significantly.

Redemption Fine and Personal Penalty:
The impugned order upheld the redemption fine and personal penalty on the appellants in terms of Section 112 of the Customs Act, 1962. The appellants argued that since the case had been settled by the Settlement Commission for the same goods, the confiscation of goods, fine, and penalty should not apply. The Tribunal noted that immunity had been granted to the appellants under a different show cause notice, but considering the obligations fulfilled under the Settlement Commission's order, a lenient approach was taken. As a result, the redemption fines and penalties were reduced substantially from the original amounts imposed by the adjudicating authority.

Final Decision:
In Appeal No. E/11020/2021, the redemption fines were reduced from Rs. 12,00,000/-, Rs. 20,00,000/-, and Rs. 7,50,000/- to Rs. 6,00,000/-, Rs. 10,00,000/-, and Rs. 4,00,000/- respectively. In Appeal No. C/11021/2021, the penalty of Rs. 20,00,000/- was reduced to Rs. 5,00,000/-. The impugned order was modified accordingly, and the appeals were partly allowed with the reduced fines and penalties.