AI Drafter 
TaxTMI 
TaxTMI 
2024 (4) TMI 918
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....03) and IGST of 18%. Acting on intelligence that the goods in these containers were mis-declared, the goods were examined, samples were drawn and sent for testing by the Central Revenue Control Laboratory [CRCL]. It appeared that the goods were actually "areca nuts" falling under CTI 0802 80 10. Raw areca nuts fall under CTI 0802 80 10 and their import is prohibited as per the foreign trade policy of the Directorate General of Foreign Trade unless their CIF value is over Rs. 251/- per kg. Supari falls under CTI 2106 90 30 and is freely importable. 3. CRCL sent its test report dated 10.12.2020 saying that "the sample is other than betel nut product known as supari as mentioned in the supplementary notes -Note 2 of the Customs Tariff Chapter 21". The imported areca nuts were seized and a Show Cause Notice [SCN] dated 23.2.2021 was issued to the respondent calling upon it to show cause as to why the imported goods declared as 'Unflavoured boiled Supari (betel nuts products)' in the two Bills of entry should not be treated as 'Areca nuts' classifiable under CTI 0802 80 20; why the goods should not be confiscated under sections 111(d), 111(l) & 111 (m) of the Customs Act, 1962 [Act] ....
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....ive prayer regarding the quantum of redemption fine has been made. There is also no cross appeal by the respondent in this case. Therefore, insofar as the confiscation of the imported goods and allowing their redemption on payment of fine are concerned, they attained finality. 11. Therefore, the only question before us is if the penalty of Rs. 2,00,000/- imposed on the respondent under section 112 is adequate or is too small. According to the Revenue, this penalty is too small and not proportionate to the offence involved. According to the respondent, the quantum of penalty does not call for any interference. Submissions on behalf of Revenue 12. Shri Rakesh Kumar, learned authorised representative for the Revenue made the following submissions: (i) The adjudicating authority has correctly absolutely confiscated the imported goods as they were imported in violation of the foreign trade policy. (ii) The respondent mis-declared the goods as 'unflavoured boiled supari (betel nuts product)' and also mis-classified them under CTI 2106 9030 so as to circumvent the prohibition on import. (iii) The goods were sent for testing to CRCL who reported that " t....
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....2 by the Commissioner (Appeals) from Rs.82,77,132/- to Rs. 2,00,000/- 17. According to the Revenue, the reduction was very high and unwarranted and according to the respondent it was fair and proper. It needs to be pointed out that section 112 provides for a penalty not exceeding the value of the goods but does not prescribe any minimum penalty. 18. Section 112 reads as follows: 112. Penalty for improper importation of goods, etc.-Any person,- (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable,- (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, w....
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....section 112 or 114 and impose penalty. However, the expression is not 'shall be confiscated' but it is 'shall be liable to confiscation'. Similarly section 112 says "shall be liable to penalty" and NOT "penalty shall be imposed". Liable to be means 'likely to be' and not 'shall be'. After finding if the goods fall under one of the clauses of the section, the adjudicating authority can exercise his discretion and decide not to confiscate them. If the violation is, for instance, a technical violation or a minor violation, the adjudicating authority has the discretion to NOT confiscate the goods although they are liable to confiscation. 25. The High Court of Delhi has, in Jain Exports (P) Ltd. [1987 (29) E.L.T. 753 (Del.)] held that not only does the adjudicating authority have the discretion to decide whether or not to confiscate but he has to exercise this discretion judicially and not arbitrarily. The relevant part of this order is as follows: ........The language does necessarily imply that there is a discretion because the language is not "such goods shall be confiscated". On the other hand the language is "such goods shall be liable to confiscation". The Collector of....