Appellant gets duty re-credit after receiving Stone Chips instead of ordered Aluminium Alloy Ingots, redemption fine set aside

CESTAT Chennai ruled in favor of appellant who ordered Aluminium Alloy Ingots but received Stone Chips instead. The tribunal set aside the redemption fine of Rs.19 lakhs imposed by Commissioner (Appeals), holding that when goods are abandoned, no redemption fine applies as confiscation merely facilitates government custody. The court granted re-credit of duty debited from Advance Authorisation Scrips for the originally ordered Aluminium Alloy Ingots, finding appellant not liable for duty on unordered Stone Chips. Penalty of Rs.30,000 remained undisturbed as appellant did not contest it.

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Issues involved:
1. Abandonment of consignment containing incorrect goods and imposition of redemption fine
2. Re-credit of duty in Advance Authorisation Scrips

Abandonment of consignment and redemption fine:
The appellant ordered 'Aluminium Alloy Ingots' but received Stone Chips instead. They sought to abandon the consignment u/s 23 of the Customs Act, 1962. The Adjudicating Authority found no offence committed and did not impose redemption fine. However, the Commissioner (Appeals) imposed a redemption fine of Rs.19 Lakhs, citing confiscation of goods. The Tribunal held that as the goods were abandoned, there was no need for redemption, and the confiscation was only for custody purposes. The Commissioner's decision to impose the redemption fine was deemed erroneous, and it was set aside.

Re-credit of duty in Advance Authorisation Scrips:
The appellant requested re-credit of duty debited from their Advance Authorisation Scrips, applicable to Aluminium Alloy Ingots. The Adjudicating Authority denied this, but the Commissioner (Appeals) allowed re-credit limited to duty for Stone Chips. The Tribunal noted that since the appellant did not receive the ordered goods, they were eligible for re-credit of duty applicable to Aluminium Alloy Ingots. The impugned order was modified to set aside the re-credit of duty for Stone Chips and allow re-credit for Aluminium Alloy Ingots. The penalty, which the appellant did not contest, remained unchanged. The appeal was allowed accordingly.

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