2017 (1) TMI 208 - AT - Customs

Tribunal upholds fines and penalties for import violations under Customs Act & Foreign Trade Act

The Tribunal upheld the Commissioner's Orders-in-Original imposing redemption fines and penalties under the Customs Act, 1962 and Foreign Trade ... Import of second hand machinery - Digital Multifunction Print and Copying Machines - amendment in the Foreign Trade Policy by which the goods have become restricted for import and from that date, prior licence from the DGFT required for import of these restricted goods - Held that: - import of these machines required licence from the DGFT which was not taken by the appellant. Therefore, the appellants have violated the provisions of Foreign Trade Policy and the Commissioner vide the impugned order has rightly passed the order of confiscation and thereafter given an option to redeem the goods on payment of fine of ₹ 13,00,000/- u/s 125 of the Customs Act 1962 and also imposed penalty of ₹ 6,00,000/- u/s 112(a) of the Customs Act, 1962. The Commissioner (Appeals) has considered all the evidence on record and has come to a right conclusion and in my view, the redemption fine and the penalty imposed by the Commissioner is not excessive and does not warrant any interference by this Tribunal - appeal dismissed - decided against appellant. Issues:Appeals against Orders-in-Original imposing redemption fine and penalty under Customs Act, 1962 and Foreign Trade (Development and Regulation) Act, 1992.Analysis:The case involved six appeals challenging Orders-in-Original passed by the Commissioner of Customs imposing redemption fines and penalties. Despite different dates of the orders, the issue was identical, leading to a common disposal of all appeals. The appeals contested the imposition of fines and penalties under Sections 111(d) and 112(a) of the Customs Act, 1962. The appellants argued that the imports of used Digital Multifunction Printers were initiated before the amendment in the Foreign Trade Policy, making the amendment inapplicable. However, the Commissioner upheld the redemption fines and penalties, leading to the appeals before the Tribunal.In the specific case of Appeal No. C/22271/2014, the appellant, a Merchant Importer, had obtained permission to import used Digital Multifunction Machines. The appellant started importing consignments in compliance with the Foreign Trade Policy and Handbook of Procedures. Despite the appellant's submission that the imports began before the policy amendment, the Commissioner imposed fines and penalties. The appellant challenged these sanctions before the Tribunal, leading to the present judgment.During the hearing, the appellant's counsel argued that the imports were permissible under the previous policy and Handbook provisions. However, the Respondent contended that post-amendment, imports required a license from the DGFT, which the appellant lacked. The Tribunal noted that after the policy amendment, the imported items became restricted, necessitating a license. As the appellant failed to obtain the required license, violations occurred, justifying the fines and penalties imposed by the Commissioner.Ultimately, the Tribunal upheld the Commissioner's orders, emphasizing the clear violation of the Foreign Trade Policy post-amendment. The Tribunal found no excessive fines or penalties, considering the policy breach. The judgment affirmed the Commissioner's decision, dismissing the appeals and maintaining the redemption fines and penalties imposed on the appellants. The Tribunal concluded that the sanctions were justified based on the post-amendment import regulations, leading to the dismissal of the appeals.This comprehensive analysis highlights the legal intricacies involved in the judgment, focusing on the interpretation and application of the Customs Act and Foreign Trade Policy in the context of the appellants' import activities and subsequent penalties imposed by the Commissioner.