Prior notice is mandatory before enhancement of redemption fine or penalty; later-furnished EPR certificate supported the original customs order.

In imports governed by the E-waste Management Rules, 2016, non-production of an Extended Producer Responsibility certificate at clearance was treated as a minor deviation where the certificate was later furnished, so the original redemption fine and penalty were considered adequate. The appellate enhancement of the fine and penalty was set aside because Section 128A(3) of the Customs Act requires prior notice and an opportunity to object before any enhancement, and no such notice was issued. The adjudicating authority's original order was restored.

---

---

Issues: (i) Whether non-production of the Extended Producer Responsibility certificate at the time of import justified only a lenient view and the original redemption fine and penalty. (ii) Whether the Commissioner (Appeals) could enhance the redemption fine and penalty without issuing notice and following the prescribed procedure.

Issue (i): Whether non-production of the Extended Producer Responsibility certificate at the time of import justified only a lenient view and the original redemption fine and penalty.

Analysis: The import was made after the E-waste Management Rules, 2016 came into force. The importer subsequently furnished the certificate and the default was treated as a minor deviation in the factual context. On that basis, the adjudicating authority's view that a limited redemption fine and penalty were adequate was found to be justified.

Conclusion: The original redemption fine and penalty were upheld and the enhanced view was not accepted.

Issue (ii): Whether the Commissioner (Appeals) could enhance the redemption fine and penalty without issuing notice and following the prescribed procedure.

Analysis: The first proviso to Section 128A(3) of the Customs Act, 1962 requires notice before any enhancement of fine or penalty is considered. As no such notice was issued, the importer was denied an opportunity to meet the proposed enhancement. The enhancement was therefore inconsistent with the statutory procedure and natural justice.

Conclusion: The enhancement was held to be legally unsustainable.

Final Conclusion: The appellate enhancement was set aside and the adjudicating authority's order was restored, leaving the importer liable only to the original fine and penalty.

Ratio Decidendi: Enhancement of redemption fine or penalty by the appellate authority cannot be sustained unless the importer is put to prior notice and afforded an opportunity of defence as mandated by the statute.

---