1991 (6) TMI 159 - AT - Customs

Appeal dismissed, fine reduced to Rs. 3,000. Penalty cut to Rs. 500. Refund for excess payments.

TIC TAC VIDEO & AUDIO Versus COLLECTOR OF CUSTOMS

The appeal was dismissed, except for the modified fine and penalty. The judge reduced the fine to Rs. 3,000 and the penalty to Rs. 500, considering the ... Confiscation and penalty Issues:1. Confiscation of video cassettes under the Customs Act, 1962.2. Applicability of Chapter IVA of the Customs Act to video cassettes.3. Failure to intimate the place of storage and maintain proper accounts.4. Imposition of fine and penalty under Sections 111(p) and 112 of the Customs Act.5. Consideration of mitigating circumstances due to the appellant's background and the nature of the breach.Analysis:The judgment involves an appeal against the order of the Additional Collector of Customs, Madras, confiscating 609 video cassettes under Section 111(p) of the Customs Act, 1962, and imposing a fine of Rs. 9,150 along with a penalty of Rs. 4,600. The proceedings stemmed from the seizure of 2181 video cassettes of foreign origin by DRI officers, leading to the impugned order. The appellant, a Sri Lankan national, argued that she was unaware of the Customs Act provisions due to arriving in India after the violence in Sri Lanka and running a video library for livelihood. The appellant contended that the cassettes were assembled in India, thus not entirely of foreign origin. The appellant's counsel emphasized the technical nature of the breach and lack of specific accounts for foreign cassettes. The Departmental Representative acknowledged the technicality of the offense and suggested a sympathetic view considering the appellant's circumstances.The judge noted that 609 cassettes were of foreign origin, requiring compliance with Chapter IVA of the Customs Act. The appellant failed to intimate the storage location within the stipulated time and maintain accounts as per statutory requirements. Despite discrepancies in accounting, a significant number of cassettes had already been released. The judge referenced the adjudicating authority's observation regarding the assembly of cassettes in India and the benefit of the doubt extended based on produced bills. Citing the Hindustan Steel Ltd. case, the judge highlighted that penalties should not be imposed for technical or venial breaches unless deliberate defiance or contumacious conduct is evident. Considering the appellant's background and the minor nature of the breach, the judge reduced the fine to Rs. 3,000 and the penalty to Rs. 500. The appellant was entitled to a refund of excess payments. The appeal was dismissed, except for the modified fine and penalty.In conclusion, the judgment addressed the confiscation of video cassettes under the Customs Act, the requirements of Chapter IVA, the failure to comply with storage intimation and accounting rules, the imposition of fines and penalties, and the consideration of mitigating circumstances. The decision reflected a balance between statutory compliance and leniency based on the specific facts and nature of the breach.