2008 (1) TMI 402 - HC - Customs

Customs Act Appeal Dismissed: Tribunal's Decision Upheld on Photocopier Import Value Discrepancies

The Court dismissed the Revenue's appeal under Section 130(1) of the Customs Act, 1962 against Final Order Nos. 674 to 680 of 2007 regarding discrepancies ... Whether the Customs, Excise and Service Tax Appellate Tribunal was justified in reducing the redemption fine imposed under Section 125 of the Customs Act, 1962 without giving any reasons, when the adjudicating authority imposes deterrent fine in order to stop the imports in violation of the Foreign Trade Policy? Whether the Customs, Excise and Service Tax Appellate Tribunal was justified in reducing the penalty imposed under Section 112(a) of the Customs Act, 1962 without giving any reasons, when the adjudicating authority imposes deterrent penalty in order to stop the imports in violation of the Foreign Trade Policy? Held that:- The fixation of the quantum of redemption is an exercise of discretionary jurisdiction of the authorities under the Customs Act. The Court can interfere only in the circumstances in which it was demonstrated before it that the order of the Tribunal is thoroughly arbitrary, whimsical and resulting in miscarriage of justice. As already stated, the Tribunal has followed its own earlier decision wherein the Tribunal has consistently imposed the redemption fine at 15 percent and penalty under Section 112(a) at 5 percent of the value of the goods, which factum has not been disputed by the counsel appearing for the Department. In the above said view of the matter, we find no question of law, much less a substantial question for entertaining these appeals. Hence, the appeals are dismissed. Issues:- Appeal under Section 130(1) of the Customs Act, 1962 against Final Order Nos. 674 to 680 of 2007.- Discrepancy in the value of imported old used photocopiers.- Confiscation of goods, imposition of penalties, and reduction of fines by the Customs, Excise and Service Tax Appellate Tribunal.- Questions of law regarding reduction of redemption fine and penalty.- Interpretation of Sections 125 and 112 of the Customs Act, 1962.- Discretion of authorities in imposing fines and penalties.Analysis:1. The case involved an appeal by the Revenue under Section 130(1) of the Customs Act, 1962 against Final Order Nos. 674 to 680 of 2007 regarding the import of old used photocopiers. The importers declared the value of the goods as invoiced by the Overseas Supplier, but a local chartered engineer appraised the value to be higher, leading to a show cause notice for confiscation, penalty, and assessment.2. The Commissioner of Customs passed orders enhancing the value of the goods, confiscating them under relevant sections, and imposing penalties. The importers appealed to the Customs, Excise and Service Tax Appellate Tribunal, which confirmed the confiscation but reduced the redemption fine and penalty. This reduction prompted the Revenue to appeal, questioning the Tribunal's reasoning for the reduction.3. The Revenue argued that the fines and penalties should act as deterrents against importing goods in violation of the Foreign Trade Policy. They cited a circular emphasizing that fines should prevent importers from profiting from contraband goods. The absence of an attempt to procure an import license was highlighted as evidence of deliberate actions by the importers.4. The Court examined Sections 125 and 112 of the Customs Act, 1962, which govern the imposition of fines and penalties. It noted that the statutes set maximum limits for fines and penalties, allowing authorities discretion to impose amounts below these limits. The Court emphasized that the Tribunal had followed precedent in reducing fines and penalties, maintaining consistency in its decisions.5. Ultimately, the Court found no substantial question of law to entertain the appeals. It dismissed the appeals, stating that the Tribunal's decision was not arbitrary and did not result in a miscarriage of justice. The consistent application of redemption fines at 15 percent and penalties at 5 percent by the Tribunal was upheld, leading to the dismissal of the appeals without costs.