AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (9) TMI 138
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.... and the definition under Section 2(1) of the Customs Act, 1962, expressly excludes the Tribunal ? (ii) Whether the order of the Tribunal directing levy of penalty under Section 112(a) is bad for want of jurisdiction, inasmuch as the above direction amounts to enhancement, for which there is no power under Section 129-B of the Customs Act, 1962, and is thus contrary to the decision of this Court in 1983 (54) STC 62 (Madras) (P.Hajee Mohamed Saliah & Co. Vs. The State of Tamil Nadu), wherein it was held that the power to enhance must be specifically provided ? and (iii) Whether the order of the Tribunal confirming the redemption fine in respect of goods which were not even available for confiscation, is contrary to the following decisions of the Tribunal, which are binding and thus bad for want of jurisdiction: (a) 2009 (237) ELT 87 (Tri-Ahmd) (Commissioner of C.Ex., Daman Vs. Ramji Board and Paper Mills) and (b) 2009 (235) ELT 623 (Tri-LB-Mumbai) (Shiv Kripa Ispat Pvt. Ltd. Vs. Commissioner of C.Ex. & Cus., Nasik). 3. The facts leading to the decision on the above questions which have fallen for consideration in the above appeal, are that the appellant-Company has be....
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....s otherwise rejected by the Tribunal. The present C.M.A. has been directed against the above order passed by the Tribunal. 4. Before we traverse in detail as to the nature of the redemption fine, contemplated and provided for under Section 125 of the Customs Act, it would only be appropriate to notice relevant provisions under the Customs Act. In Section 2, various expressions found mentioned in the Customs Act, have been defined. In sub-section (1) thereof, "adjudicating authority" has been defined as meaning any authority competent to pass any order or decision under the Act, but does not include the Central Board of Excise and Customs constituted under the Central Board of Revenue Act, 1963 (Act 54 of 1963), the Commissioner (Appeals) or the Customs, Excise and Service Tax Appellate Tribunal constituted under Section 129 of the Customs Act. Under Section 11 of the Act, if the Central Government is satisfied that it is necessary so to do for any of the purposes specified in sub-section (2) thereof, it may, by notification in the Official Gazette, prohibit either absolutely or subject to such conditions to be fulfilled before or after clearance of the import or export of goods ....
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....sumption or warehousing purpose. Under sub-section (4) thereof, the importer was also required to produce the invoice if any relating to the imported goods. Under Section 47(1) of the Act, where proper officer is satisfied that the goods entered for home consumption are not prohibited goods, and the importer has paid the import duty assessed thereon and the charges if any payable under the Act in respect of the same, he may make an order permitting the clearance of the goods for home consumption. Under sub-section (2) thereof, where the importer fails to pay the import duty within two days, excluding holidays from the date on which the Bill of Entry is returned to him for payment of duty, he shall pay interest at such rate not below 10% and not exceeding 36% per annum on such duty, till the date of payment of the said duty. Under Section 48, if the imported goods are not cleared for home consumption or warehoused or transhipped within 30 days from the date of the unloading thereof at a customs station, such goods may, after notice to the importer, be sold by the person having the custody thereof. Thus, the interest of the Revenue was sought to be protected to the extent feasible by....
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....ia. Analysis of the various clauses contained under Section 111 of the Act, clearly brings out that the prohibited goods which are imported, are one such class of goods which are liable to be confiscated. Similarly, the goods which have been imported in excess of those mentioned in the import manifest, or not mentioned in the import manifest, are also liable to be confiscated. Similarly, any imported goods, which have been exempted from payment of duty, subject to any condition in respect of which the condition so imposed, was found to have been not observed, are also liable to be confiscated. Thus, in a variety of circumstances and contingencies, the goods which have been improperly imported into India, are liable to suffer confiscation under this Section. 11. The provisions contained in Section 111 are clearly directed against the goods. In juxtaposition to this, under Section 112(a) of the Act, any person, who in relation to any goods, does or omits to do any act, which act or omission, would render such goods liable for confiscation under Section 111 of the Act, shall be liable to a penalty, in respect of which any prohibition is in force under the Act, not exceeding the val....
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....o cleared those goods, without verifying as to whether an appropriate Bill of Entry is lodged or not and then they have suffered the incidence of duty or not. 14. In those circumstances, no inference can be drawn against the importer-Company that they have made an attempt to evade the incidence of duty payment all due to mis-statement of fact or such similar reason. Therefore, very rightly the Tribunal has interfered with the penalty imposed by the Commissioner of Customs in the order appealed before it. 15. But unfortunately, the Tribunal has fallen into grave error in imposing penalty against the importer under Section 112(a) of the Customs Act. The inspiration was drawn by the Tribunal on the basis that the show cause notice has proposed to impose the penalty under Section 112(a) of the Act, against the importer. The Tribunal ought to be aware that it has been kept outside the scope of expression "adjudicating authority" under sub-section (1) of Section 2 of the Act. Consequently, the Tribunal has no power to adjudicate at the first instance, any imposition of penalty leviable under the Act, either against the goods or the person concerned. If at all the adjudicating autho....
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....ated, less in the case of imported goods the duty chargeable thereon. (2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1), the owner of such goods or the person referred to in sub-section (1), shall, in addition, be liable to any duty and charges, payable in respect of such goods." 18. The principal contention that is canvassed before us is that the fine contemplated under Section 125 is a redemption fine and hence, the goods which are improperly imported, are liable to be cleared. In other words, Section 125 is considered as providing for a redemption fine, and therefore, the availability of goods is a pre-requisite for offering the redemption fine. The argument proceeds that when once the goods imported improperly are not available for redemption, the question of payment of fine would not arise. Where the goods are not physically available, the Department could not have imposed the redemption fine. On that score, the penalty imposed under Section 125 of the Act is sought to be faulted. 19. Per contra, learned Senior Standing Counsel appearing for the Revenue placed reliance upon the meaning of the noun "redemption" as found in "Compact Ox....
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....uch goods cannot be cleared for home consumption. 21. We are, therefore, of the opinion that insofar as the prohibited goods are concerned, they are prevented from being imported either absolutely or conditionally and consequently, the question of making an offer for payment of fine under Section 125 of the Act, would not arise, without studying the implication of such import. 22. We must also bear in mind that for improper importation of the dutiable goods or the prohibited goods, the importer is liable to be proceeded against under Section 112 of the Act by subjecting him to a penalty. Therefore, the fine proposed to be imposed under Section 125 of the Act is directed against the goods, in addition to the one that was already provided for under Section 112 of the Act. The fine contemplated is for redeeming the goods, whereas, the importer is sought to be penalised under Section 112 for doing or omitting to do any act which rendered such goods imported by him, liable to be confiscated under Section 111 of the Act and for that act or omission, the appellant is liable to be penalised. 23. The penalty directed against the importer under Section 112 and the fine payable under....