2014 (11) TMI 68 - Commissioner - Customs

Imported Goods Confiscation & Penalties Upheld, Procedural Lapses Addressed

The case involved issues of confiscation of imported goods without a specific import license, enhancement of declared value, imposition of redemption fine ... Confiscation of goods - Redemption fine and penalty - Whether by an Order passed under Section 129B of the Customs Act, 1962, the Tribunal should set aside the said Order and remand the case back to Commissioner of Customs (Appeals) for re-fixation of fine and penalty or pass any other such order as may deem fit - Held that:- since the petitioner had failed in its duty in pointing out the fact that the Department’s appeal was pending when the Tribunal took the assessee’s appeal for hearing, it was no longer open to the petitioner to turn round and to point a finger at the Tribunal in these circumstances. While they are able to appreciate the anxiety now being shown by the Department, they are unable to accept Mr. Radhakrishnan’s submission that the decision of the Tribunal as also of the High Court, should be set aside in order to accommodate the Department which had failed to point out to the Tribunal that the appeals preferred by the Department were also pending. Such an order would unsettle matters which have already been settled and would amount to giving premium to the negligence of the Department especially when the Commissioner of Customs, CESTAT and the High Court had all held in favour of the noticees and have directed return of all the 78 bars of gold to them. More than 8 years have passed since the gold bars were seized and there can be no justification for the matter to be dragged on further on account of the laches of the Department. It is legally not feasible for this appellate authority, which is subordinate to the Hon’ble CESTAT to entertain this appeal. The appellant-department is directed to approach the Hon’ble CESTAT and seek a proper resolution for their ineptness - matter remanded back - Decided in favour of appellants. Issues Involved:1. Confiscation of imported goods without a specific import license.2. Enhancement of the declared value of imported goods.3. Imposition of redemption fine and penalty.4. Adjudication and appeal processes and outcomes.Issue-wise Detailed Analysis:1. Confiscation of Imported Goods Without a Specific Import License:The importer, M/s. Saidutta Enterprises, imported 4400 kgs of used/defective Tungsten Carbide Tips and filed Bill of Entry No. 170, dated 10-4-2000. The goods were examined and found to be as declared, but the importers could not produce the required specific Import Licence as per Para 5.3 of the Import and Export Policy, 1997-2002. Consequently, the goods were confiscated under Section 111 of the Customs Act, 1962. The adjudicating authority confirmed the confiscation under Section 111(d) and (m) of the Customs Act, 1962, read with Section 11(5) of the FTDR Act, 1992, and imposed a penalty under Section 112(a) of the Customs Act, 1962.2. Enhancement of the Declared Value of Imported Goods:The declared value of the imported goods was US $ 3.5 per kg (Rs. 153.30 per kg), which was considered lower than the value of identical goods imported at Nhava Sheva Customs House. The adjudicating authority enhanced the value to Rs. 210 per kg based on contemporaneous imports. The importer contested this enhancement, arguing that the goods were of assorted sizes, rusted, and some had chipped edges, making them unserviceable. The Commissioner (Appeals) and the CESTAT upheld the enhancement based on contemporaneous imports.3. Imposition of Redemption Fine and Penalty:The Joint Commissioner initially imposed a redemption fine of Rs. 1,86,480 (Rs. 42 per kg) and a penalty of Rs. 15,000. The Commissioner (Appeals) reduced the redemption fine to Rs. 42,000 and the penalty to Rs. 4,700, considering the importer's status as an actual user and SSI Unit. The CESTAT upheld this reduction. The Department's appeal to the CESTAT argued for higher penalties to discourage unlawful importation, but the CESTAT remanded the matter for reconsideration of the correct margin of profit for imposing fine and penalty.4. Adjudication and Appeal Processes and Outcomes:The importer and the Department both filed appeals against the Commissioner (Appeals)' order. The CESTAT upheld the Commissioner's order in the importer's appeal, sustaining the confiscation, enhancement of value, and penalties. In the Department's appeal, the CESTAT remanded the matter for reconsideration of the fine and penalty. The Additional Commissioner, in de novo proceedings, reaffirmed the confiscation and enhanced value but maintained the reduced fine and penalty as per the Commissioner (Appeals)' order upheld by the CESTAT. The Department's subsequent appeal argued that the Additional Commissioner did not reconsider the margin of profit for fine and penalty as directed by the CESTAT.Conclusion:The appellate authority noted the procedural lapses, including the failure to consolidate cross appeals and the Department's acceptance of the CESTAT's order in the importer's favor. The authority directed the Department to seek resolution from the CESTAT, emphasizing the importance of adhering to judicial processes and rectifying procedural errors.