TaxTMI 
TaxTMI 
2024 (11) TMI 750
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....100% examination of the goods at M/s Sea Shore Logistics, SEZ Mundra, upon the examination of goods imported in 7 containers, the quantity of the PCB were found to be 276525 as against declared quantity of 296251. 1.1 It was also noted that maximum number of PCBs were old and used, also a number of packages and sheets were having marking as rejected and/or containing 'X' mark as a sign of being rejected. It was noticed that many packages were having slips containing date/ year of manufacturing as 2009, 2010, 2013 etc. The PCBs were having marking of M/s Genus or M/s Philips. The officers also drew representative samples from the consignment as the goods appear to be old and used and the appellant had declared the value of the entire consignment as Rs.184,25,76,231/-. The services of chartered engineers and government approved valuer M/s. B. G. Bhatt & Co. Ahmedabad were taken to ascertain approximate value of subject consignment. The chartered engineer vide report dated 08.10.2022 reported that estimated C & F value of the consignments as Rs.18.67 Crores, therefore, it appears that the appellant had mis-declared the goods with respect to description and value of goods an....
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....provision of law in as much as the Circular does not specify any amount of Bank Guarantee or Security Deposit. The Circular refers to only securing the interest of the revenue in case of dutiable goods, in such situation the differential duty leviable is required to be taken into consideration. In the present case, since the goods were imported by the SEZ and the same is to be exported, no duty involvement is there, therefore the question of any revenue interest is not involved. He further submits that the entire basis of seizure of the goods is Chartered Engineer certificate wherein, Chartered Engineer found that the 5% goods are rejected. He submits that there is no evidence of arriving at the conclusion by the Chartered Engineer, therefore, only on the basis of the Chartered Engineer certificate, goods are not liable for seizure. He submits that since the goods are meant for export from SEZ, question of confiscation, redemption fine, penalty does not arise. He placed reliance on the following judgments:- Hazel Mercantile Ltd vs. Commissioner of Custom, Kandla 2022 (379) E.L.T. 357 (Tri.-Ahmd.) SankarPandi vs. Union of India 2002 (141) E.L.T. 635 (Mad.) ....
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.... Court held as under: "Heard the learned Counsel for the parties. 2.The petitioner in this Writ Petition is aggrieved by the orders passed directing the petitioner to pay penalty regarding payment of redemption value for the articles which are brought from Singapore. Subsequently, the petitioner contended that he is no longer interested to take return for the purpose of use or consumption within India, but he wanted to re-export the same. Therefore, he prayed that he need not pay any redemption value. No order has been passed in the revision petition where such prayer has been made. Hence, the present Writ Petition has been filed. 3.It appears that the question relating to re-export is covered by the decision of the Supreme Court rendered in the case of Siemens Limited v. Collector of Customs reported in S.C. 1999 (113) E.L.T. 776. Keeping in view the abovesaid decision there cannot be any doubt that the petitioner is entitled to re-export the articles in question and for the abovesaid purpose, it is not necessary for him to pay redemption fine as imposed by the authorities. 4.The learned Counsel for the petitioner further submitted that since th....
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.... can be reduced from Rs. 2 lakhs to Rs. 1,00,000/- (Rupees one lakh only). 8. The impugned order is modified to the extent of setting aside the redemption fine totally and reducing the penalty from Rs. 2 lakhs to Rs. 1,00,000/- (Rupees one lakh only). The appeal is partly allowed in the above terms." In the case of M/s. Simplex Engineers & Traders Final Order No.41581/2019 dated 26.11.2019, by the CESTAT Chennai bench following order was passed: "5. The first issue is with regard to the redemption fine imposed. The appellant is willing to re-export the goods and is not contesting the order passed directing the appellant to re-export the goods. The Hon'ble Apex Court in the case relied upon by the ld. counsel for appellant has affirmed the decision of the Hon'ble High Court wherein it was held that redemption fine cannot be imposed when the goods have to be redeemed only for the purpose of export. Following the said decision, I am of the view that the redemption fine imposed is unjustified and requires to be set aside, which I hereby do. 6. The second issue is with regard to the penalty imposed. Ld. counsel has adverted to the contract entered into betw....
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....section 115, such fine shall not exceed the market price of the goods confiscated, 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.] [(3) Where the fine imposed under sub-section (1) is not paid within a period of one hundred and twenty days from the date of option given thereunder, such option shall become void, unless an appeal against such order is pending. Explanation. - For removal of doubts, it is hereby declared that in cases where an order under sub-section (1) has been passed before the date on which the Finance Bill, 2018 receives the assent of the President and no appeal is pending against such order as on that date, the option under said sub-section may be exercised within a period of one hundred and twenty days from the date on which such assent is received." 7.2.1 Clearly, as the heading itself points out, the fine i.e., redemption fine, is an option in lieu of confiscation and....
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....ated above, is sufficient to attract penalty. Therefore, I am of the view that the penalty appears to be justified. 8.2.2 In this regard, I draw support from the decision of the Hon'ble jurisdictional High Court, relied on by the Ld. Advocate for the appellant in the case of SankarPandi (supra) which decision has thereafter been upheld by the Hon'ble Apex Court, as reported in 2018 (360) E.L.T. A214 (S.C.), wherein similar penalty has been upheld. 8.3 But however, considering the facts and circumstances of this case and the undisputed bona fides of the appellant, the penalty under Section 112 (a) is reduced to Rs. 10,000/- only. The impugned order of the First Appellate Authority on the penalty under Section 112 (a) is therefore modified to this extent. 9. In the result: (i) The impugned order as regards the redemption fine is set aside; (ii) The impugned order as regards the penalty under Section 112 (a) is modified to the extent as indicated above; 10. The appeal is partly allowed." In case of Lalkamal Enterprises, the division bench of Chennai CESTAT passed the following order:- "5.1 The main contention of the dep....
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....ent of the Ld. Advocate in respect of non-imposability of redemption fine when the goods have been ordered for re-export. The redemption fine imposed notwithstanding, is an overkill and will require to be set aside, which we hereby do. So ordered. 5.3 Coming to the matter of penalty, we do note that even though "Druid" was not specifically mentioned in the Bill of Entry, all the other documents including those required under Hazardous Wastes Rules were furnished at the time of import. Nonetheless, we find that Lalkamal, the High sea buyer, M/s. Sterling Steels, the original importer will surely require a rap on the knuckles at least for the wrong declaration in the Bill of Entry. However, the penalties imposed on these persons under Section 112(a) of the Customs Act, 1962 of Rs. 2 lakhs each, in our view, is excessive and interest of justice would be served by reducing the penalties on them to Rs. 1,00,000/- (Rupees one lakh only). So ordered. We further note that the penalties on the other appellants Vimal Kumar, Asif Rehman cannot be sustained since they are proprietors of Sri Lalkamal Enterprises and Sterling Steels respectively and it is settled law that both proprieto....
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.... would not collude for getting the supply of cheaper goods while paying for more expensive goods. Indeed we find that primary adjudicating authority after taking into account the facts and circumstances of the case has stated that "since the goods so found are not as per the order placed by the importer, I allow the said goods to re-export". It is obvious from this observation of the primary adjudicating authority that no foul play was suspected, let alone established, by him. Indeed, the facts and circumstances of the case clearly point towards the absence of any mala fide on the part of the appellants. We find that that CESTAT in similar circumstances has held repeatedly that for allowing re-export, RF and penalties are not warranted as is evident from the following judgments : (a) Simens Public Communication Networks Ltd. v. C.C. (Airport), Calcutta - 2001 (137) E.L.T. 623 (Tri.-Kolkata). (b) Guru Ispat Ltd. v. C.C (Port), Calcutta - 2003 (151) E.L.T. 384 (Tri.-Kolkata). (c) HCL Comnet Systems & Services Ltd. v. C.C., New Delhi - 2003 (158) E.L.T. 349 (Tri.-Del.). Our attention was also drawn to the Circular of the Board No. 100/2003, dated 28....