2018 (10) TMI 1809 - AT - Customs

Tribunal reduces fine, eliminates penalty in Customs Act case

J.M. FERRO ALLOYS PVT. LTD. Versus C.C. (AIR CARGO IMPORT), MUMBAI

The Tribunal upheld the confiscation of imported goods under Sections 111(d) and 111(m) of the Customs Act, 1962 due to misdeclaration but reduced the ... Confiscation of imported goods - imposition of redemption fine and penalty - clearance of 50,000 pieces of Printed Circuit Boards usable in electric panels with 8 GB RAM - goods were found to be old and used 256 MB DDR RAM of various brands - restricted goods or not - HELD THAT:- In this case, admittedly the goods were found to be old and used DDR RAMs, as against the declaration made in the Bill of Entry as PCBs and that such goods were prohibited for import in terms of the FTP and the Hazardous Waste (Management, Handling and Transboundary) Rules, 2008. Thus, the goods actually found during the course of examination were liable for confiscation inasmuch as the provisions of clauses (d) and (m) of Section 111 are attracted. However, on perusal of the statement recorded by the department from the Authorized Representative of the high seas seller, it is found that the said person had specifically stated that the goods were supplied other than the goods which were ordered for and that due to inadvertence, the overseas supplier had supplied the said goods to the Indian buyer, instead of the buyer located in Jordan, who placed the purchase order for buying the said goods. The department has not brought on any evidence to prove that the appellant had prior knowledge of such misdeclared goods. Thus, under the circumstances of the case, the redemption fine imposed on the appellant is in the higher side, which can be reduced in the interest of justice. Imposition of penalty - HELD THAT:- Due to wrong notion, the overseas supplier had supplied the old and used DDR RAMs to the high seas seller in India, which were meant for supply to a buyer in a different country. Further, on perusal of the statement recorded from the Authorized Representative of the high seas seller, it transpires that the overseas supplier had rectified its mistake by supplying the actual goods, which were ordered for by the Indian buyer. Thus, under such circumstances of the case, it cannot be said that the appellant is exposed to the penal consequences provided under Section 112(a) ibid. The impugned order is modified to the extent of reducing the quantum of redemption fine from ₹ 35,00,000/- to ₹ 5,00,000/- - So far as imposition of penalty under Section 112(a) ibid is concerned, the impugned order is set aside - Appeal allowed in part. Issues:1. Confiscation of imported goods under Customs Act, 1962.2. Imposition of redemption fine and penalty on the appellant.3. Appeal against the adjudication order before the Tribunal.Analysis:Issue 1: Confiscation of imported goods under Customs Act, 1962The case involved the appellant importing goods declared as Printed Circuit Boards but found to be old and used DDR RAMs during examination, violating import restrictions. The adjudication order confiscated the goods under Section 111(d) and Section 111(m) of the Customs Act, 1962. The Tribunal noted that the goods were misdeclared and prohibited for import, justifying confiscation. However, it considered the statement from the high seas seller's Authorized Representative, indicating inadvertent supply of wrong goods without appellant's prior knowledge. As a result, the Tribunal found the redemption fine imposed on the appellant excessive and reduced it in the interest of justice.Issue 2: Imposition of redemption fine and penalty on the appellantSection 112(a) of the Customs Act, 1962 mandates penalty for improper importation of goods. The appellant argued acting in good faith without prior knowledge of the actual goods received. The Tribunal observed the lack of evidence proving appellant's involvement in the misdeclaration, highlighting the overseas supplier's mistake rectification. Consequently, the Tribunal set aside the penalty imposed under Section 112(a), as the appellant was not deemed liable for the penal consequences specified in the provision.Issue 3: Appeal against the adjudication order before the TribunalThe appellant appealed to the Tribunal against the adjudication order, contesting the confiscation, redemption fine, and penalty. The Tribunal, after considering submissions from both sides, modified the impugned order. It reduced the redemption fine significantly and completely set aside the penalty imposed under Section 112(a), thereby allowing the appeal in favor of the appellant. The Tribunal disposed of the appeal based on the revised terms, providing relief to the appellant in the matter.This detailed analysis of the judgment highlights the key issues, legal provisions, arguments presented, and the Tribunal's decision, ensuring a comprehensive understanding of the case's outcome and implications.