2026 (1) TMI 487 - AT - Customs

Redemption fine and penalty dispute over seized used-car import u/s125/s.112(a); fine waived, penalty reduced on appeal.

Redemption fine imposed under s.125 of the Customs Act for import of a used car in violation of Foreign Trade Policy conditions was held inapplicable ... Importation of a used car by the owner, from UK to India - violation of the conditions of the Foreign Trade Policy as brought out in Chapter 87 Notes - Waive of redemption fine - Whether the levy of penalty is sustainable in law ? - HELD THAT:- We note that redemption fine was imposed under Section 125 of the Customs Act which, the Appellant declines to accept as he is not even willing to accept a disfigured car seized and kept in the Custody Of Customs, fearing the road worthy condition of the car and hence, we allow the Miscellaneous Application and the prayer made therein. Though the Original Authority has imposed the above penalty apparently after considering the plea of the Appellant but, however, the fact remains that the import of the car in question was made by the Appellant without being aware of the laws relating to the import and also owing to the loss of his wife, which made him to come back to India once for all. Though penalty is leviable, but in view of the above peculiar facts of the case, we deem it appropriate to reduce the penalty under Section 112(a) and to that extent we allow the Appeal partly. Issues: Whether the levy of penalty under Section 112(a) of the Customs Act, 1962 is sustainable in law in the facts of the present case.Analysis: The Tribunal examined the facts that the appellant imported a used car and declared a CIF value which was rejected under Rule 12 of the Customs Valuation Rules, 2007 leading to re-determination of value under Rule 9 and Section 14 of the Customs Act, 1962. The adjudicating authority also denied Transfer of Residence concession on account of the appellant's travel history and proceeded to confiscate the vehicle under Section 111(d) read with Section 3(3) of the Foreign Trade (D&R) Act, 1992 and imposed a redemption fine under Section 125. The appellant later sought waiver of redemption and limited his challenge before the Tribunal to the penalty under Section 112(a). The Tribunal took into account the appellant's personal circumstances, bona fide nature of import and lack of awareness of the import regulations, and exercised its discretion to mitigate penal consequences while recognising that penalty is leviable in law.Conclusion: The levy of penalty under Section 112(a) is reduced from Rs.25,000 to Rs.5,000 and the appeal is partly allowed in favour of the assessee on this issue.