2013 (11) TMI 339 - AT - Customs

Tribunal rules against post-loading import restrictions, reduces fines and penalties

BHAGWAN ELECTRO PHOTOCOPIERS Versus COMMISSIONER OF CUS., AMRITSAR

The Tribunal ruled in favor of the appellants in a case involving the confiscation of imported goods and imposition of penalties due to import ... Import of old and used Digital Multifunctional Printer Copier/Scanner/Facsimile Machine with standard accessories - confiscation and penalty - Held that:- reason for confiscation of the imported goods or for imposition of penalties upon the appellant is that at the time of filing of bill of entry, the goods were restricted items. Admittedly prior to 5-6-2012, the items in question were importable under OGL. The other admitted fact is that the bill of lading is dated prior to 5-6-2012, in both the cases. As such, when the goods were exported and loaded in the ship, they were exported admittedly not restricted items - issue is settled laying down that subsequent introduction of the restriction on import cannot act prejudice to the imports already initiated. As such, we find that confiscation of the goods or imposition of penalty on this count is not justified - Following decision of Priyanka Overseas Pvt. Ltd. v. Union of India [1990 (11) TMI 145 - SUPREME COURT OF INDIA], Paras Textiles v. CC, New Delhi [2008 (9) TMI 746 - CESTAT, NEW DELHI] and Om Petro Chemical v. Union of India [2001 (12) TMI 306 - DELHI HIGH COURT] - Decided in favour of assessee. Undervaluation of goods - Held that:- both the appellants are not challenging the same inasmuch as the differential duty is much on the lower side. As such, we find that the imported goods are liable to confiscation and appellants are liable to penalty on the said count of undervaluation of goods. However, keeping in view, the differential duty involved in the case of M/s. Bhagwan Electro Photocopiers was to the extent of Rs. 1,35,000/-, we reduce the redemption fine to Rs. 1,00,000/- and personal penalty to Rs. 50,000/-. Similarly, in the case of M/s. Best Mega International, the differential duty is to the extent of Rs. 40,000/- we reduce the redemption fine to Rs. 20,000/- and penalty to Rs. 15,000 - Decided partly in favour of assessee. Issues:1. Confiscation of imported goods and imposition of penalties due to restriction on import.2. Disputed value of goods and imposition of customs duty.3. Confiscation and penalties based on undervaluation of goods.Analysis:Issue 1: Confiscation of imported goods and imposition of penalties due to restriction on importThe case involved two appellants, one importing 'Digital Multifunctional Printer Copier/Scanner/Facsimile Machine' and the other importing a 'Digital Multifunctional Device.' The goods were loaded from the export port before the introduction of import restrictions. The lower authorities confiscated the goods and imposed penalties due to the lack of an import license. However, the Tribunal referred to legal precedents, including a Supreme Court decision and other judgments, stating that restrictions imposed after the loading of goods cannot be the basis for confiscation or penalties. The Tribunal ruled that the confiscation and penalties based on the subsequent introduction of import restrictions were not justified.Issue 2: Disputed value of goods and imposition of customs dutyIn the case of both appellants, the value of the imported goods was disputed, and customs duty was enhanced based on the opinion of a Chartered Engineer. The appellants did not provide the opinion of an overseas Chartered Engineer regarding the value. The Tribunal upheld the decision to enhance the value of the goods, resulting in an increase in the customs duty payable by the appellants. However, the Tribunal reduced the redemption fines and penalties imposed by the lower authorities considering the differential duty involved. The Tribunal reduced the redemption fines and personal penalties for both appellants based on the differential duty amounts.Issue 3: Confiscation and penalties based on undervaluation of goodsBoth appellants did not challenge the undervaluation of goods as the differential duty was relatively low. The Tribunal acknowledged the liability for confiscation and penalties due to undervaluation but reduced the redemption fines and penalties for both appellants based on the differential duty amounts involved. The Tribunal reduced the redemption fines and penalties for both appellants in consideration of the lower side of the differential duty.In conclusion, the Tribunal disposed of both appeals by reducing the redemption fines and penalties for the appellants based on the differential duty amounts involved. The judgment clarified that import restrictions introduced after the loading of goods cannot serve as a basis for confiscation or penalties, citing relevant legal precedents.