Customs appeal: Confiscation set aside, penalty reduced. Importance of clear orders for fair resolutions.

EMINENCE TECHNOLOGIES Versus COMMR. OF CUS., C. EX. & SERVICE TAX, NOIDA

EMINENCE TECHNOLOGIES Versus COMMR. OF CUS., C. EX. & SERVICE TAX, NOIDA - 2019 (370) E.L.T. 825 (Tri. - All.) Issues: Mis-declaration of goods leading to enhanced assessable value, re-export of goods, confiscation, redemption fine, penalty under Section 112(a) of Customs Act, financial loss due to demurrage.

In the present case, the appeal arose from an Order-in-Original passed by the Commissioner of Customs, Noida, regarding mis-declaration of goods in two Bills of Entry filed by the appellant as parts of mobile phones, whereas the import was of complete mobile phones. The original authority enhanced the assessable value, ordered re-export of the entire consignment, confiscated goods worth Rs. 1.09 Crore, imposed a redemption fine of Rs. 8.00 Lakhs, and a penalty of Rs. 2.00 Lakhs under Section 112(a) of the Customs Act, 1962. The appellant challenged the confiscation, redemption fine, and penalty, arguing that since the goods were re-exported, redemption and penalty should not apply, and demurrage costs caused financial loss.

Upon hearing both parties, the Tribunal found the original authority's order contradictory as it directed redemption and re-export of goods, which would deprive the appellant of ownership, making redemption unenforceable. The Tribunal held that the original authority should have either ordered re-export without confiscation or confiscated the goods with an option for redemption. Since the goods were re-exported, the Tribunal set aside the confiscation and deemed the redemption fine unsustainable. The penalty under Section 112(a) of the Customs Act, 1962 was reduced to Rs. 50,000. Therefore, the appeal was partially allowed, addressing the issues of confiscation, redemption fine, and penalty.

The judgment highlighted the importance of clarity in orders involving re-export and confiscation, ensuring that penalties and fines are imposed in accordance with ownership of goods. The Tribunal's decision aimed to rectify the inconsistencies in the original authority's order and provide a fair resolution by setting aside the confiscation and reducing the penalty, considering the re-exported goods' ownership status.