2024 (3) TMI 702 - AT - Customs

Confiscation - fine - penalty - Mis-declaring the quantity of cigarettes imported under warehouse bill of entry for re-export purpose - HELD THAT - On reading of the observations made by the learned Commissioner (Appeals), we find that he took a lenient view in reducing the quantum of penalty on the appellant. However, considering the overall facts and circumstances of the case, more particularly, absence of the profit margin involved in the case in hand and that the confiscated goods were still under the custody of the department, we are of the view that the ends of justice would be met, if the quantum of penalty is further reduced. Thus, the impugned order is modified to the extent of reducing the quantum of penalty from Rs.10,00,000/- (Rupees Ten Lakhs) to Rs.5,00,000/- (Rupees Five Lakhs) u/s 112(a) ibid, which shall be paid forthwith by the appellant. The appeal is disposed of in the above terms.

Summary

Issues:
The issues involved in the judgment are mis-declaration of quantity of imported goods, imposition of penalty under Section 112(a) of the Customs Act, 1962, reduction of penalty by the Commissioner of Customs (Appeals), and further reduction of penalty by the Tribunal.

Mis-declaration of Quantity of Imported Goods:
The case revolved around the mis-declaration of the quantity of cigarettes imported by the appellant. The officers of Directorate of Revenue Intelligence had developed intelligence indicating mis-declaration by certain importers, leading to show cause proceedings and subsequent confiscation of the cigarettes.

Imposition of Penalty under Section 112(a) of the Customs Act, 1962:
The original order had imposed a penalty of Rs.50,00,000 on the appellant under Section 112(a) of the Customs Act, 1962. On appeal, the Commissioner of Customs (Appeals) upheld the confiscation and imposition of redemption fine but reduced the penalty to Rs.10,00,000, citing reasons such as the perishable nature of the goods and absence of profit in the transaction.

Reduction of Penalty by the Commissioner of Customs (Appeals):
The Commissioner of Customs (Appeals) took a lenient view in reducing the penalty imposed on the appellant, considering factors such as the perishable nature of the goods, lack of profit margin, and possible malafide intention. The penalty was reduced from Rs.10,00,000 to Rs.5,00,000 under Section 112(a) of the Customs Act, 1962.

Further Reduction of Penalty by the Tribunal:
Upon review of the case records and the observations of the Commissioner of Customs (Appeals), the Tribunal further reduced the quantum of penalty from Rs.10,00,000 to Rs.5,00,000, emphasizing the absence of profit margin, the perishable nature of the goods, and the fact that the confiscated goods were still under the custody of the department.

In conclusion, the Tribunal modified the impugned order by reducing the penalty to Rs.5,00,000, which the appellant was directed to pay forthwith. The appeal was disposed of accordingly.