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of <h1>Tribunal reduces penalties for unintentional gold bar weight violation, emphasizes intent in regulatory breaches.</h1> <h3>M/s Shirpur Gold Refinery Ltd. Versus Commissioner of Customs (II), Airport Special Cargo, Mumbai</h3> M/s Shirpur Gold Refinery Ltd. Versus Commissioner of Customs (II), Airport Special Cargo, Mumbai - TMI Issues:Violation of conditions of import license and Customs Notification No. 12/2012 dated 17.3.2012 for importing gold under concessional rate.Analysis:The appellants, importers of gold for industrial use, imported gold under Notification No. 12/2002-Cus dated 17.3.2012, allowing import at a concessional rate of 8% subject to conditions 5 and 34. Condition 5 required following the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. Condition 34 specified various requirements for import, including direct shipment from the producing country, specific weights, assay certificates, and intended use for refining and manufacturing standard gold or silver bars of specified purities. The appellants informed the Commissioner that a supplier had mistakenly shipped a Gold Dore Bar below the required weight, and they sought to rectify the error by re-exporting the bar. The Commissioner found violations of the DGFT license and Customs Notification conditions, confiscating one gold bar and imposing penalties based on Supreme Court decisions and circulars.The Commissioner, considering the unintentional nature of the mistake and lack of undue profit gain for the appellants, offered the option to redeem the confiscated goods for re-export on payment of a fine. The appellants contended that the mistake was genuine without any intention to evade duty. The Tribunal acknowledged the inadvertent nature of the mistake and the absence of mala fides, leading to a revision of the redemption fine from Rs. 7 lakhs to Rs. 2 lakhs and a reduction in the personal penalty from Rs. 3.5 lakhs to Rs. 50,000. The Tribunal partially allowed the appeal based on the genuine error and lack of substantial gain for the appellants, modifying the penalties accordingly.In conclusion, the Tribunal recognized the unintentional nature of the mistake made by the importers in importing a gold bar below the prescribed weight limit, leading to violations of licensing conditions and Customs Notification requirements. Despite the violations, the Tribunal considered the lack of intent to evade duty and significant profit gain, leading to a reduction in the redemption fine and personal penalty imposed on the appellants. The decision highlighted the importance of assessing the circumstances and intentions behind regulatory breaches to determine appropriate penalties in cases of inadvertent errors without malafide intentions.
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