2016 (9) TMI 75 - AT - Customs

Tribunal rules on redemption fine for imported goods, stresses need for security proof

M/s Carina Creations, New Dehli Versus Commissioner of Customs, Kolkata

The Tribunal allowed the Revenue's appeal in a case concerning confiscation and redemption fine for imported goods. The Tribunal emphasized that ... Imposition of redemption fine – confiscation - Sec 125 of the Customs Act 1962 – imported goods not available for confiscation – bond / bank guarantee – Held that: - in the case of Weston components Ltd. Vs. CC, New Delhi 2000 (1) TMI 45 - SUPREME COURT OF INDIA, it was held that, for ordering confiscation / redemption either the goods should be physically available for confiscation or an instrument in the form of bond / bank guarantee should exist when the goods were released to the Respondent. Here it was argued that a bond / Bank guarantee has been executed by the appellant. Adjournment was given to the AR to produce such Bond / Bank guarantee executed by the Respondent. No such Bond / Bank guarantee executed by the appellant is brought on record till date. The matter is remanded to the Adjudicating authority for the limited purpose of deciding the matter afresh in the light of Bond / Bank Guarantee if any executed at the time of release of the imported goods. If there is no Bond and or Bank Guarantee given by the Respondent at the time of release of goods then no redemption fine can be imposed – matter remanded – appeal allowed. Issues:- Confiscation and redemption fine when imported goods are not available for confiscation.Analysis:The appeal was filed by the Revenue against the order passed by the Adjudicating authority regarding the confiscation of goods. The Revenue argued that redemption fine can be imposed even if the goods are not physically available for confiscation, citing the case law of Weston Components Ltd. Vs. CC, New Delhi. The Revenue also referred to the case law of Dadha Pharma Pvt. Ltd. Vs. Secretary GOI to support their argument. The issue at hand was whether confiscation and redemption fine can be ordered in a situation where the imported goods are not physically available for confiscation. The Tribunal noted that redemption fine in lieu of confiscation makes sense when the importer/exporter has something at stake, typically the goods. The Tribunal emphasized that if neither the goods are available for confiscation nor any instrument like an ITC bond or bank guarantee is available, the situation becomes complex. The Tribunal highlighted that the case law relied upon by the Revenue did not apply in a scenario where no bond or bank guarantee was executed at the time of goods release.The Tribunal further noted that during the hearing, the Revenue claimed that a bond or bank guarantee had been executed by the appellant. However, no such document was produced as evidence. Consequently, the matter was remanded to the Adjudicating authority to reevaluate the case in light of the existence of any bond or bank guarantee executed at the time of goods release. The Tribunal clarified that if no bond or bank guarantee was given at the time of release, then no redemption fine could be imposed. Ultimately, the appeal by the Revenue was allowed, and the case was remanded to the Adjudicating authority for further consideration based on the presence or absence of the required bond or bank guarantee.