2024 (8) TMI 216 - AT - Customs

CESTAT waives redemption fine on goods allowed for re-export, reduces penalty to Rs 1 lakh following HCL precedent

CESTAT Kolkata held that redemption fine cannot be imposed when goods are allowed for re-export, following precedent from HCL Hewlett Packard Ltd. case. ... No redemption fine where goods are allowed for re export - scope of redemption under the Customs Act - confiscation and re export as alternative to forfeiture - reduction of excessive penaltyNo redemption fine where goods are allowed for re export - scope of redemption under the Customs Act - Whether redemption fine could be imposed where the goods were permitted to be re exported - HELD THAT: - The Tribunal held that when adjudicating authorities allow goods to be re exported, they cannot impose a redemption fine as a condition of re export. Reliance was placed on earlier tribunal decisions which interpreted the limited scope of the redemption provision and held that authorities lack power to compel re export by imposing conditional redemption. Given that the appellant had obtained and relied on a Pre Shipment Inspection Certificate and that the goods were permitted to be re exported by the adjudicating authority, the Tribunal found no fault on the part of the importer and concluded that the redemption fine imposed in those circumstances was not imposable. [Paras 10]Redemption fine set aside.Reduction of excessive penalty - Whether the penalty imposed on the appellant required modification - HELD THAT: - The Tribunal examined the penalty imposed under the Customs Act and concluded that the amount fixed by the adjudicating authority was on the higher side. In exercise of its appellate power the Tribunal reduced the penalty to a lesser sum as a just and proportionate response to the circumstances, including the appellant's reliance on the Pre Shipment Inspection Certificate and absence of deliberate fault by the importer. [Paras 11]Penalty reduced to Rs.1,00,000.Final Conclusion: Appeal allowed in part: redemption fine set aside and penalty reduced; matter disposed. Issues:Appeal against waiver of redemption fine and reduction of penalty.Analysis:The case involved an appeal seeking waiver of redemption fine and reduction of penalty imposed on the appellant. The appellant filed a Bill of Entry for clearance of Lead Scrap 'Radio' with a declared value. The goods were examined, revealing a mix of lead scrap and used shells/cartridges, violating import restrictions. The impugned order held the goods liable for confiscation but allowed re-export on payment of a redemption fine and imposed a penalty. The appellant contested for waiver of redemption fine and reduction of penalty. The tribunal noted that the appellant did not dispute re-export and had obtained a Pre-Shipment Inspection Certificate. The issue considered was whether redemption fine could be imposed in case of re-export. Citing precedents, the tribunal held that in cases of re-export, adjudicating authorities lack power to impose redemption fines. The tribunal also reduced the penalty imposed on the appellant. Consequently, the redemption fine was set aside, and the penalty reduced to Rs.1,00,000. The appeal was disposed of accordingly.