Appeal granted: Redemption fine waived, penalty reduced citing precedent.

The Tribunal partly allowed the appeal by setting aside the redemption fine imposed on imported goods directed for re-export and reducing the penalty from Rs. 2,00,000 to Rs. 50,000, citing precedents where redemption fines for re-exported goods were not sustainable. The impugned order was modified accordingly.

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Issues:
Redemption fine and penalty imposed on imported goods.

Analysis:
The appellants imported 10,000 kgs of Cloves of Indonesian origin, valued at Rs. 52,95,790, and were assessed duty of Rs. 5,70,621. After inspection, the goods did not conform to FSSAI standards, leading to a direction for re-export with a redemption fine of Rs. 5,00,000 and a penalty of Rs. 5,00,000 under section 112(a) of the Customs Act, 1962. The Commissioner (Appeals) reduced the redemption fine to Rs. 3,00,000 and the penalty to Rs. 2,00,000. The appeal before the Tribunal focused on contesting the redemption fine and penalty imposed, not challenging the re-export order (para 1).

The appellant's counsel argued that based on a previous Tribunal order, no redemption fine could be imposed when goods are directed for re-export. Regarding the penalty, it was highlighted that the appellant suffered losses due to the goods not being cleared for home consumption, requesting leniency (para 2).

The department's Authorized Representative supported the impugned order, emphasizing the justification of the redemption fine and penalty due to the nature of the goods as food items (para 3).

In considering the issue, the Tribunal referred to a previous case involving redemption fine for re-export of goods, where the High Court and Supreme Court decisions were cited. Following this precedent, the Tribunal concluded that the redemption fine imposed for re-export could not be sustained and was set aside. Additionally, the penalty of Rs. 2,00,000 was deemed excessive, considering the re-export of goods, leading to a reduction to Rs. 50,000 (para 4-5).

In conclusion, the Tribunal partly allowed the appeal by setting aside the redemption fine and reducing the penalty to Rs. 50,000. The impugned order was modified accordingly (para 5).

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