AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 311
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....e of Conformity of Production as prescribed under the Environmental Protection Rules, 1986 (EPR 1986). Since the appellant could not furnish the certificates from the supplier, they vide their communication dated 30.3.2022 opted for amendment of the BE from home consumption to warehousing in terms of section 49 of the Customs Act, 1962 (CA 1962) and requested for re-export of the diesel engines. The appellants vide letter dated 30.5.2022 requested the adjudicating authority to adjudicate the subject issue and waived issuance of Show Cause Notice. After due process of law, the adjudicating authority confiscated the 8 diesel engines and one industrial engine imported vide Bill of Entry dated 4.12.2021 and allowed redemption of the said goods on payment of fine of Rs.8 lakhs for the purpose of re-export as requested within a period of 60 days. The adjudicating authority also imposed penalty of Rs. 3 lakhs on the appellant. The appellants paid the redemption fine and penalty under protest as they were incurring heavy demurrage charges. The appellants filed an appeal before Commissioner (Appeals) who vide the impugned order rejected the appeal and allowed 30 days' time for re-exporting ....
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....1 (377) ELT 458 (Tri Chennai) (g) Lalkamal Enterprises v. Commissioner of Customs, Chennai I reported in 2018 (364) ELT 856 (Tri Chennai) He further submitted that when the goods have been re-exported, the question of confiscation of goods under Section 111(d) of the Customs Act, 1962 does not arise and when there is no question of confiscation, redemption fine under Section 125 and penalty under Section 112(a) cannot be imposed. For which he relied on; (h) Skylark Office Machines v. Commissioner of Customs, Chennai [2020 (374) E.L.T. 99 (Tri. - Chennai)] (i) M/s. SDS Ramcides Crop Science Pvt. Ltd. v. CC, Chennai II [2023 (7) TMI 891 - CESTAT CHENNAI] He hence prayed that the impugned order may be set aside. 5. The learned AR supported the findings in the impugned order. He drew attention to the Larger Bench decision of this Tribunal in Hemant Bhai R. Patel Vs Commissioner Of Customs [2003 (153) ELT 226 (Tri-LB)], wherein it was held that the Adjudicating Authority had powers to impose redemption fine and penalty even when re-export was permitted. He hence prayed that the impugned order merits to be upheld. 6. Heard both sides. The question that needs to be answered is w....
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....rtation and exportation of goods. In this case the goods were imported in contravention of the provisions of the EPR, 1986. They were hence 'prohibited goods'. 10. The Hon'ble Supreme Court in M/s Om Prakash Bhatia Vs. Commissioner of Customs, New Delhi [(2003) 6 SCC 161], after examining the term "prohibited goods" as defined in Section 2(33) of the CA 1962, held as under; "From the aforesaid definition, it can be stated that (a) if there is any prohibition of import or export of goods under the Act or any other law for the time being in force, it would be considered to be prohibited goods; and (b) this would not include any such goods in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either 'absolutely' or 'subject to such conditions' to be fulfilled before or after clearance, as may be specified in the notification, the import or export of the goods of any spec....
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....Customs Act? The relevant part of Section 125 of the Customs Act reads as under :- Section 125(1) of the Customs Act, 1962 "125. Option to pay fine in lieu of confiscation. - (1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit : xxxx xxxx xxxx" 69.1 A bare reading of the provision aforesaid makes it evident that a clear distinction is made between 'prohibited goods' and 'other goods'. As has rightly been pointed out, the latter part of Section 125 obligates the release of confiscated goods (i.e., other than prohibited goods) against redemption fine but, the earlier part of this provision makes no such compulsion as regards the prohibited goods; and it is left to the discretion of the Adjudicating Authority that it may give an op....
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....ds used in the statute are prima facie enabling the Courts will readily infer a duty to exercise power which is invested in aid of enforcement of a right -public or private-of a citizen. In Julius v. Bishop of Oxford it was observed by Cairns, L.C., at pp. 222-223 that the words "it shall be lawful" conferred a faculty or power, and they did not of themselves do more than confer a faculty or power. But there may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed to exercise that power when called upon to do so." Lord Blackburn observed in the same case at pp. 244-245 that the enabling words give, a power which prima facie might be exercised or not, but if the .object for which the power is conferred is for the purpose of effectuating a right there may be a duty cast upon the donee of the power to exercise it for the benefit of those who have that right when required on their....
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....egally responsible or answerable." 31. When we examine Rule 173Q it does appear to us that apart from the offending goods which are liable to confiscation the person concerned with that shall be liable to penalty up to the amount specified in the Rule. It is difficult to accept the argument of the appellant that levy of penalty is discretionary. It is only the amount of penalty which is discretionary. Both things are necessary : (1) goods are liable to confiscation and (2)) person concerned is liable to penalty." (emphasis added) Hence there is no discretion with the Proper Officer, not to confiscate goods that are found liable to such action as per section 111(d) of the CA 1962. As per the discussion above the Customs Act only provides a distinction between 'prohibited goods' and 'other goods' under Section 125(1) of the CA 1962 for the purpose of allowing redemption of the goods. 14. From the discussions it is clear that an order permitting re-export of goods is sequentially a separate process which would come into play only after the importer redeems the confiscated goods. Simply because the decision is bundled along with a quasi-judicial order will not change the sequence ....
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....sed and if the importer requests for its export, no fine can be imposed. The position is legally untenable. The offence does not get cured by the intended destination of the goods. Confiscated goods can be redeemed either for home consumption / warehousing or for export only on payment of a fine. I find that the impugned order is legal and proper and no interference in the discretion exercised by the Proper Officer is called for. The Hon'ble Supreme Court in its judgment in Duncan Industries Ltd. and Anr Vs Union of India [AIR 2006 SC 3699 / 2006 (3) SCC 129] held as under; "We are broadly in concurrence with the reasoning of the High Court that in matters of administrative discretion it is not open to the courts to interfere in minute details, except on grounds of mala fides or extreme arbitrariness. Interference should be only within very narrow limits, such as, where there is a clear violation of a statute or a constitutional provision, or extreme arbitrariness in the Wednesbury sense." The appellants averments in this regard are hence rejected. No penalty under Section 112(a) cannot be imposed when goods are re-exported. 18. A penalty is the result of a breach of statutory....