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TMI Blog2022 (2) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... uted to the respondents; he relies upon Oriental Containers Ltd. [ 2003 (3) TMI 126 - HIGH COURT OF JUDICATURE AT BOMBAY ] wherein it was held confiscation of goods is not correct when the assessee was innocent victim of the fraud played by the foreign supplier and that the assessee should not be held guilty of violation of the provisions of Customs Act - Learned Commissioner finds that penalty under Section 114AA can be levied only if a person has knowledge and intent in commission or omission under the Act and therefore, he was not inclined to impose any penalty under Section 114AA of the Customs Act, 1962. Redemption fine - penalty - HELD THAT:- The Redemption fine and penalty should be imposed depending on the facts of the case and the seriousness of consequences of misdeclaration. Looking into the fact that mens rea is absent in the instant case, we find that redemption fine and penalty can be reduced. In the circumstances where it is held by adjudicating authority that respondents did not have mens rea, the imposition of redemption and penalty can be at a minimal level commensurate with the commission or omission by the respondents. Accordingly, the redemption fine impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .41609 of 2018 - FINAL ORDER No.40029-40030/2022 - Dated:- 1-2-2022 - MS. SULEKHA BEEVI C.S., MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri J.P.Khaitan, Senior Advocate Assisted by Ms. L.Maithili, Advocate - For the Assessee Ms. K. Komathi, ADC (A.R) - For the Revenue ORDER M/s. Indian Oil Petro Pvt Ltd. (the respondents in C/ No.41009/ 2016) have imported 2943.85 MTs of LPG Butane and 3022.00 MTs of LPG Propane from M/s. Royal Petrol Trading LLC, Sharjah, UAE; the respondents paid customs duty and the products were allowed to be discharged; on the basis of information received, the officers of Customs alleged that the country of origin was mis-declared and accordingly they seized the goods on 14.02.2014; the goods were released on payment of ₹ 8 Crores as deposit along with bond for ₹ 39,72,00,000/-; A show cause notice was issued seeking to confiscate the goods; enhance the value on the basis of freight and insurance charges. The show cause notice was adjudicated by order dated 29.01.2016 holding that the country of origin was Iran and not UAE as declared by the respondents; the master and the crew members were responsible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g country of origin as Jebel Ali, UAE. 4. Regarding valuation, Learned Senior Counsel submits that it can be seen from the spot offer letter dated January 15, 2014 that the price that was agreed by them and the supplier was Saudi Aramco (contract price) January (+) US$ 44.50 per metric tonne on CFR basis to Ennore Port, India; the invoice dated January 19, 2014 also indicates that the price was for CFR at Ennore; thus, the price accepted by the supplier and the respondent is inclusive of freight till the place of import. The respondents furnished documents to show that the freight was about 3.70 % to 4.66% of the FOB value in respect of imports made by IPPL from Qatar and Abu Dhabi, U.A.E which are same origin; in the case of respondents, the freight was 4.36% and 4.41% respectively for Butane and Propane and the freight is comparable to that of other importers from the same region; therefore, the department cannot argue that the freight on the differential 441 nautical miles between Jebel Ali, U.A.E and Kharg island, Iran remained to be included in the transaction value. Learned Commissioner has accepted such evidence and found that the freight declared was acceptable. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judication levies or withheld from deposit of ₹ 8 crores made by the company at the time of provisional release of goods, rejection of refund of such huge amount of ₹ 7.30 crores is highly disproportionate considering the fact that the differential duty demand, if any, comes only to ₹ 87,81,154/-. Learned Counsel submits that the Assistant Commissioner took note of the Circular No.572/9/2001-CE dated 22nd February 2001 wherein it was directed that the refund claim should not be withheld on the ground that an appeal had been filed against the order giving relief unless stay order had been obtained; the appellants have in fact given an undertaking that the amount payable by them in case Revenue appeal was decided by Tribunal in favour of Revenue. Learned Counsel submits that the Asst Commissioner cannot pass demand order to recover refund already sanctioned by terming it as erroneous refund as held by Hon ble Madras High Court in the case of Eveready Industries Ltd. Vs CESTAT- 2016 (337) ELT 189 (Mad.) ; Hon ble Andhra Pradesh High Court in the matter of Commissioner Vs Panyam Cements Minerals Industries Ltd. - 2016 (331) ELT 206 (AP) and this Bench in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts or their officers had any prior knowledge of the same. We find that except for the document recovered by the department from the vessel, we find that no documents whatsoever, in possession of the respondents, were brought on record to indicate that the respondents had prior knowledge and intent to mis-declare. We find that the respondents had bona fide belief that the country-of-origin certificate issued by the Chambers of Commerce and Industry, Abu Dhabi is genuine. We find that the Revenue while investigating the case has not referred the matter to the originating country seeking for any clarification or cancellation of the said country of origin certificate issued by the Chambers of Commerce and Industry of that country. We are of the considered opinion that as long as authentic documents are not disowned or corrected by the authorities in the country of origin, the respondents cannot be faulted in the declarations they have filed at the time of Bill of Entry. We find that the Commissioner has given a categorical finding in the OIO dated 29.01.2016 as under: As I have already decided that the master and other crew members of the said vessel have connived with the previou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases where mens rea exists; mere act of misdeclaration of any material particular in the customs documents would render goods liable for confiscation and would render concerned persons to consequential penalty under Section 112.It can be noted that Section 112 also does not presuppose existence of mens rea. Having said so, we find however, that the Redemption fine and penalty should be imposed depending on the facts of the case and the seriousness of consequences of misdeclaration. Looking into the fact that mens rea is absent in the instant case, we find that redemption fine and penalty can be reduced. In the circumstances where it is held by adjudicating authority that respondents did not have mens rea, we find that imposition of redemption and penalty can be at a minimal level commensurate with the commission or omission by the respondents. Accordingly, we are inclined to reduce the redemption fine imposed under Section 125 from ₹ 50,00,000/- to ₹ 5,00,000/- and penalty imposed under Section 112 on M/s. IOPPL from ₹ 20, 00,000 to ₹ 2,00,000/-. 14. Coming to the valuation of goods, we find that the respondents have successfully demonstrated that the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C/41609/2018) against impugned order dated 28.3.2018, we find that CBEC vide circular dated 22.02.2001 in para-3 has clarified as under: (3) The cases where refund arises due to order of Commissioner (Appeals) or Commissioner of Central Excise/Customs and decision is taken to contest them before CEGAT. In such cases appeal/stay application should be filed expeditiously well before the expiry of stipulated period of three months (and not waiting for the last date of filing of appeal). However, no refund/rebate claim should be withheld on the ground that an appeal has been filed against the order giving the relief, unless stay order has been obtained. It would be the responsibility of the concerned Commissioner to obtain stay order expeditiously where the orders passed by Commissioner (Appeals) suffer from serious infirmities and it involves grant of heavy refunds. 16. We also find that vide circular dated 1.6.2015, same instructions have been reiterated. We find that the departmental officers are bound by the directions of the CBEC. Moreover, as submitted by the Learned Counsel, the respondents in the instant case have made a security deposit of ₹ 8 crores and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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