Appellate Tribunal reduces redemption fine for goods confiscated without import license

The Appellate Tribunal CEGAT, Bombay heard an appeal against an order-in-original that confiscated goods due to lack of a valid import license. The Tribunal reduced the redemption fine from Rs. 7 lakhs to Rs. 1,00,000, considering the goods' nature and condition. The penalty was remitted as the appellant promptly sought clarification from the licensing authority and cooperated diligently. The appeal was disposed of with the above decisions, granting consequential relief.

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Issues:
1. Appeal against order-in-original for confiscation and imposition of fine and penalty.
2. Challenge on the proportionality of the redemption fine.
3. Argument against penalty imposition based on licensing authority's mistake.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Bombay was against the order-in-original that confiscated three containers of diesel engines, axle assemblies, and crankshafts, with a redemption fine of Rs. 7 lakhs and a penalty of Rs. 70,000 imposed by the Additional Collector of Customs. The goods were not covered by a valid import license at the time of shipment or clearance, leading to confiscation. The appellant did not contest the confiscation but argued that the redemption fine was disproportionate to the goods' value and condition. The appellant highlighted that the declared value of the goods was equivalent to metal scrap, not new goods, questioning the application of a profit margin of 350% to 400% without tangible basis. The appellant also contended that no penalty should be imposed as they had taken steps based on the licensing authority's clarification, even though the license was subsequently amended due to the authority's mistake.

During the hearing, the appellant's counsel argued for a reduction in the quantum of the fine and the setting aside of the penalty. The Tribunal noted the Addl. Collector's observation that the declared value of the goods suggested a condition similar to metal scrap, questioning the high profit margin applied to determine the redemption fine. Consequently, the Tribunal reduced the redemption fine from Rs. 7 lakhs to Rs. 1,00,000, considering the nature and condition of the goods. Regarding the penalty, the Tribunal acknowledged that the appellants had promptly submitted the license for amendment upon the licensing authority's request and had sought clarification before the import, showing diligence and cooperation. Therefore, the Tribunal decided to remit the penalty, showing leniency based on the circumstances. The appeal was disposed of with the above decisions, providing consequential relief to follow.

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