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TMI Blog2024 (11) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... Enterprises, [ 2018 (2) TMI 657 - CESTAT CHENNAI] in case of re-export of the goods the redemption fine was set aside and minimal amount of penalty was imposed. The case of the appellant is on better footing for the reason that in all the cases cited above are in respect of the DTA importer whereas, in the present case the goods were meant for warehousing in SEZ. The SEZ is governed by the SEZ Act along with Customs Act because any movement of the goods into and from SEZ is controlled by officers. Therefore, it cannot be expected that any person operating in the SEZ or warehousing in the SEZ can have malafide intention to evade duty. Therefore, in our considered view Bond for the total value of the goods is sufficient for releasing the seized goods for re-export thereof. As regard the judgments cited by the revenue, we find that none of the judgments is related to the SEZ unit or SEZ warehouse. Therefore, the ratio of those judgments is not applicable in the facts of the present case. Having observed above, we make it clear that the above observation is limited to the decision for provisional release of the goods that too only for re-export of the goods and the said observation sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of goods and accordingly, the goods were liable to confiscation under Section 111 (m) of the Customs Act, 1962. 1.2 Further, it appeared that the goods appeared to be restricted and importable against authorization issued by the DGFT as per the DGFT Notification No.05/2015-2020, dated 07.05.2019. However, as the appellant failed to submit any authorization issued by the DGFT, such goods having declared value of Rs.9,21,28,811/- and actual value of Rs.93.35 Lakhs appeared to be liable to confiscation under Section 111 (d) of the Custom Act, 1962. Therefore, the subject goods imported vide 41 bills of entry in seven containers were placed under seizure vide seizure memo dated 11.01.2023 under the provisions of Section 110 (1) of the Customs Act, 1962. On conclusion of investigation a show cause notice dated 18.08.2023 was issued to several noticees including the appellant by the Additional Commissioner of Customs, Custom House, Mundra. The appellant vide letters dated 07.09.2023 and 16.09.2023 had requested the adjudicating authority for permission to re-export the goods. The Assistant Commissioner of Customs, Adjudication Section, Mundra Port, MP SEZ, Mundra vide latter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd vs. Commissioner of Customs, Tuticorin 2021 (377) E.L.T. 458 (Tri- Chennai) M/s. Rose Mary International vs. Commissioner of Customs, Final Order No. 40148/2020 M/s. Simplex Engineers Traders vs. Commissioner of Customs (Import) Final Order No.41581/2019 M/s. O.M.S. Sivajothi Mills vs. The Commissioner of Customs, Final Order No.41028/2019 Lalkamal Enterprises vs. Commissioner of Customs, Chennai 2018 (364) E.L.T. 856 (Tri.- Chennai) Regal Impex vs. Commissioner of Cus., ICD, TKD, NEW Delhi, 2016 (332)E.L.T.835 (Tri. Delhi) Siemens Limited vs. Collector of Customs 1999 (113)E.L.T. 776 (S.C.) 3. Shri Sanjay Kumar, Ld. Superintendent (AR) appearing on behalf of the revenue, reiterates the findings of the impugned order. He placed reliance on the following judgments:- 2024 (387) E.L.T. 76 (Tri. Chennai) in the matter of Ocean Sky Impex Pvt. Ltd Vs. CC, Chennai 2023 (386) E.L.T. 780 (Tri. Bang.) in the matter of Hardex Vs. CC, Kerala 2021 (377) E.L.T. 145 (S.C.) in the matter of Union of India Vs. Raj Grow Impex LLP 2024 (390) E.L.T. 3 (S.C.) in the matter of Navayuga Engineering Co. Ltd Vs. Union of India. 4. We have carefully considered the submissions made by both the sides and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Counsel appearing for the Department has opposed to this stating that the petitioner has violated and the penalty has been rightly imposed. 6.In the facts and circumstances of the case, I feel the imposition of penalty of Rs. 33,000/-, keeping in view the relevant value of the articles concerned, appears to be grossly high and interest of justice would be met by reducing the penalty to Rs. 15,000/- and such amount should be paid by the petitioner within a period of two weeks from the date of receipt of this order. Only after the amount is paid, the petitioner would be permitted to re-export the items concerned. 7.In the result, the Writ Petition is partly allowed. No costs. Consequently, connected W.M.Ps. are closed. The above decision of the Madras High Court has been up held by the Hon'ble Supreme Court reported at Union of India vs. Sankar Pandi 2018 (360) E.L.T. A214 (S.C.) Selvam Industries Ltd (supra), the Chennai bench of this Tribunal passed the following order:- 6. From the judgment of the Hon ble Jurisdictional High Court in SankarPandi, it is seen that when the goods are re-exported no redemption fine can be imposed. The said decision was affirmed by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulations. There being violation of said Regulations, I am of the view that the facts attract imposition of penalty under Section 112(a) of the Customs Act, 1962. However, the penalty of Rs.2 lakhs imposed is on the higher side. In the interest of justice, the penalty is reduced to Rs.50,000/- (Rupees fifty thousand only). The impugned order is modified to this extent. Appeal is partly allowed in above terms. The identical view was taken by the Chennai bench of the CESTAT in the case of M/s. O.M.S. Sivajothi Mills, Final Order No.41028/2019 dated 22.08.2019, wherein the Tribunal has passed the following order:- 5. I have heard the rival contentions, perused the orders of the lower authorities and have also gone through the various decisions relied upon by both the parties. 6. The scope of the appeal and the issue therefore to be decided is the liability of the appellant to redemption fine under Section 125 of the Customs Act, 1962 over and above confiscation and the penalty under Section 112 (a) ibid. 7.1 Section 125 of the Customs Act, which renders an option to an importer to pay fine in lieu of confiscation, reads as under : SECTION 125. Option to pay fine in lieu of confiscat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confiscation remains unchallenged, the importer accepts the order of confiscation and even the exporter offers willingness to accept back (re-export) the consignment, there cannot be any question of redemption fine. Therefore, the redemption fine imposed and upheld by the First Appellate Authority cannot sustain and is accordingly set aside. 7.2.2 This view is supported by various judicial precedents relied on by the Ld. Advocate for the assessee. 7.3 In the order of this Bench in the case of M/s. Chennai Marine Trading Co. P. Ltd. (supra) relied upon by the Ld. AR, the very imported consignment itself was a restricted item for import. In the peculiar facts and circumstances of the case, the binding decision of the Hon ble jurisdictional High Court and the Hon ble Supreme Court (supra) prevails and therefore, the appeal as regards this issue is allowed. 8.1 The next issue agitated by the appellant is the levy of penalty under Section 112 (a) of the Customs Act. For the sake of convenience, the same is extracted hereinbelow : SECTION 112. Penalty for improper importation of goods, etc. Any person, - (a) who, in relation to any goods, does or omits to do any act which act or omission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules with TNPCB and that all the requirements of Rules including submission of Form-9 and submission of pre-shipment inspection certificate has been complied with original importer M/s. Sterling Steels at the time of import. Be that as it may, this entire imbroglio appears to have occurred due to the fact that registration certificate granted to M/s. Lalkamal was for inter alia import of copper scrap of B-1010 whereas the department contends that the imported item does not meet those specifications; that they are in fact falling within the description of Sl. No. 7 of Schedule IV of the Hazardous Waste Rules namely that they are copper wire scrap of Druid grade. We find that the entire dispute has arisen only because of this apparent discrepancy. While the imported goods were in fact copper wire scrap only, even as per the commercial invoice, pre-shipment inspection certificate etc. and Form-9 submitted under Rule 16(5) of the Hazardous Wastes Rules, the declaration of the goods in the Bill of Entry as copper waste scrap, lead scrap and insulation material separately has not helped their case with the department. Very possibly, the appellant had made such a declaration taking into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e partly allowed on above terms. In case of Regal Impex (supra) the Principle bench of New Delhi in the case of re-export of the irregularly imported goods, the following order was passed: 5. We have considered the contentions of both sides and perused the relevant records. It is evident that the orders for 49.5 MT + 49.5 MT of LDPE were placed on 20-7-2009 and part payment was also made in advance. There is evidence of confirmation of receipt of those orders by the supplier on 20-7-2009 itself. The supplier in this case is a well established multi-national on M/s. Basell International Trading FZE. It is also seen that the documents relating to the import goods were released by the bank after receiving the balance amount from the appellant. It is also an admitted fact that when the appellant took up the matter with the supplier immediately on coming to know that goods imported were different from the goods ordered, the supplier immediately confessed to the mistake having been made and returned the money through bank and also agreed to bear the expenses with regard to re-export of thee goods. The contention of the Revenue that whole exercise might have been to avoid anti-dumping dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplier had admitted to any mistake on its part and even there CESTAT only stated that such goods could also be liable to confiscation and redemption fine. 6. In the light of the analyses above, we are of the view that there is no reasonable ground for imposition of fine and penalty as a condition for re-export of the goods and therefore we set aside the impugned order and allow re-export of the impugned goods without any fine and penalty. The appeal is thus allowed. 4.1 From the above judgments, it can be seen that in case of re-export of the goods the redemption fine was set aside and minimal amount of penalty was imposed. The case of the appellant is on better footing for the reason that in all the cases cited above are in respect of the DTA importer whereas, in the present case the goods were meant for warehousing in SEZ. The SEZ is governed by the SEZ Act along with Customs Act because any movement of the goods into and from SEZ is controlled by officers. Therefore, it cannot be expected that any person operating in the SEZ or warehousing in the SEZ can have malafide intention to evade duty. Therefore, in our considered view Bond for the total value of the goods is sufficient ..... X X X X Extracts X X X X X X X X Extracts X X X X
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