CESTAT Hyderabad: Duty, Penalty, Redemption Fine Reduced on MFD Copiers Appeal

The Appellate Tribunal CESTAT HYDERABAD partially allowed the appeal against the Commissioner (Appeals) order upholding duty enhancement, redemption fine, and penalty on imported MFD copiers. The Tribunal reduced the penalty to &8377; 15,000 and the redemption fine to 10% of the value, amounting to &8377; 3,15,000, due to the timing of the FTP amendment and lack of intention to violate conditions. The judgment provided partial relief to the appellants by modifying the redemption fine and penalty.

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Issues:
Appeal against Commissioner (Appeals) order upholding duty enhancement, redemption fine, and penalty imposition on imported MFD copiers; Challenge on redemption fine and penalty imposition based on FTP amendment timing and lack of intention to violate conditions; Argument for waiver of penalty and improper redemption fine calculation; Violation of FTP condition by the appellants as per AR's submission.

Analysis:
The appeal before the Appellate Tribunal CESTAT HYDERABAD was against the Commissioner (Appeals) order that upheld the enhancement of duty, redemption fine, and penalty imposed on the imported MFD copiers. The appellants had imported Canon MFD printer cum copiers and declared a value of &8377; 27,64,211/-. However, the value was enhanced to &8377; 31,38,238/- due to an amendment in para 2.17 of the Foreign Trade Policy (FTP) just prior to the filing of the Bill of Entry. The adjudicating authority imposed a redemption fine of &8377; 4,30,000/- and a penalty of &8377; 2,15,000/ which was upheld by the Commissioner (Appeals), leading to the current appeal.

During the proceedings, the appellant's counsel argued that they were not contesting the value enhancement but focused on challenging the redemption fine and penalty imposition. It was highlighted that the goods were received in the port before the FTP amendment restricting the import of MFD copiers came into effect. The counsel emphasized that there was no intention to violate the FTP conditions as the purchase order was placed when there were no restrictions. The appellant sought a waiver of the penalty and questioned the calculation of the redemption fine, stating that it was not based on actual profit margins.

On the other hand, the Ld. AR representing the respondent reiterated that the appellants had indeed violated the FTP condition, justifying the imposition of the redemption fine and penalty as reasonable and proper. After considering the submissions, the Member (Judicial) noted that the appellant had placed the purchase order and received the goods before the FTP amendment restricting the import of MFD copiers was introduced. Therefore, the imposition of a high penalty was deemed unwarranted in the circumstances. The Member reduced the penalty to &8377; 15,000 and the redemption fine to 10%, amounting to &8377; 3,15,000, to meet the ends of justice. Consequently, the appeal was partly allowed with the reduced redemption fine and penalty, along with any consequential reliefs.

In conclusion, the Appellate Tribunal CESTAT HYDERABAD, through the judgment delivered by Member (Judicial), modified the redemption fine and penalty imposed on the appellants for importing MFD copiers, considering the timing of the FTP amendment and lack of intention to violate conditions, thereby providing partial relief to the appellants.

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