Passengers lose appeals against customs penalties for smuggling iridium, ruthenium, electronics and watches at airport

CESTAT Kolkata dismissed appeals filed by passengers intercepted at airport for smuggling grey metal powder (Iridium and Ruthenium), micro SD cards, stone beads, and branded watches without paying customs duties. The tribunal upheld redemption fines and penalties imposed on appellants, finding smuggling activities established. However, CESTAT modified Ruthenium valuation to Rs.3,00,000 per kg, directing adjudicating authority to recalculate duty accordingly. The courier company employee involved in transportation was also held liable for penalties.

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Issues Involved:
1. Valuation of the goods in question.
2. Quantum of redemption fine.
3. Penalty imposed on the appellants.

Summary:

Issue 1: Valuation of the Goods

All the appellants challenged the valuation of the goods in question. The goods included metal powders suspected to be Iridium and Ruthenium, memory cards, stone beads, and branded watches. The valuation was based on the metal bulletin issued by the Director General of Valuation, C.B.E.C., NIDB data, purchase invoices, and website details. The Tribunal found that the valuation adopted by the adjudicating authority was through proper analysis except for Ruthenium, where the value was arrived at by adding duty quantum, overhead, and profit margin. The Tribunal disagreed with this method and decided that the value of Ruthenium should be Rs. 3,00,000/- per kg, which falls within the range of Rs. 2.82 lakhs to Rs. 3.38 lakhs per kg as determined by the adjudicating authority. The duty was directed to be re-quantified accordingly.

Issue 2: Quantum of Redemption Fine

The appellants also challenged the quantum of redemption fine. The adjudicating authority had allowed the goods to be redeemed on payment of applicable Customs duty and a redemption fine of Rs. 50,00,000/-. The Tribunal found the redemption fine imposed on the appellants for the release of the seized goods to be justified and upheld the same.

Issue 3: Penalty Imposed

Penalties of Rs. 5,00,000/- were imposed on each of the four passengers who were apprehended and on Meraj Ahmed, the owner of M/s. Mahalaxmi Air Cargo Enterprise. The Tribunal found the penalties imposed to be justified and dismissed the appeals on this ground.

Conclusion:

The Tribunal directed the adjudicating authority to re-calculate the duty payable by the appellants based on the revised valuation of Ruthenium if they desired to get the release of the goods. The appeals were disposed of on these terms.

Order Pronounced:

(Order pronounced in the open court on 03.05.2024)

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