2013 (7) TMI 29 - AT - Customs

Redemption fine - assessee contested that goods has been provisionally released against the bond and bank guarantee furnished - Held that - Just because the goods are not available for confiscation the Commissioner cannot say that the same are not liable for confiscation as in terms of judgment of Weston Components Ltd. vs. CC New Delhi (2000 (1) TMI 45 - SUPREME COURT OF INDIA) redemption fine is imposable even after release of the goods and that mere fact that the goods were released on bond would not take away the power of the Customs authorities to levy redemption fine if subsequent to release of the goods the import was not found to be valid or there is any other irregularity which would render the goods liable for confiscation. Thus the Commissioner s orders not imposing redemption fine is incorrect. Revenue s appeal is allowed.

Summary

Issues:
Allegation of gross undervaluation in imported goods, provisional release against bond, imposition of duty demand, penalty, and redemption fine.

Analysis:
In this case, the respondent faced allegations of gross undervaluation in the consignment of transistors and dials imported by them. The goods were provisionally released against bond and a bank guarantee. The Commissioner confirmed a total duty demand of Rs. 3,15,02,649/- along with interest and imposed a penalty of equal amount. However, the Commissioner did not order for the confiscation of the offending goods as they were not available. A Committee of Chief Commissioners reviewed the order and found it legally improper based on the judgment in Weston Components Ltd. vs. CC, New Delhi. The Committee believed that a redemption fine could be imposed even if the goods were provisionally released. The respondent did not challenge this order, leading to an appeal by the Revenue.

The Revenue argued that the Commissioner's decision not to confiscate the goods and impose a redemption fine was incorrect. They highlighted that the value of the goods had been significantly under-declared, and the Commissioner's reasoning for not confiscating the goods was contrary to legal provisions and the Apex Court's judgment in Weston Components Ltd. vs. CC, New Delhi. The Revenue contended that since the goods were provisionally released against bond and bank guarantee, the Commissioner should have ordered confiscation and imposed a redemption fine under Section 125 of the Customs Act.

Upon considering the arguments, the Tribunal found that the goods, even if not available for confiscation, could still be liable for confiscation. Citing the Apex Court's judgment in Weston Components Ltd. vs. CC, New Delhi, the Tribunal held that the Commissioner's decision to not impose a redemption fine was incorrect. The Tribunal set aside the portion of the impugned order related to the goods not being confiscated due to unavailability and remanded the matter to the Commissioner for a fresh decision in line with the Apex Court's judgment. Consequently, the Revenue's appeal was allowed, emphasizing the authority of Customs officials to levy redemption fines even after the release of goods on bond.

This judgment underscores the importance of adhering to legal provisions and court precedents in matters of duty demand, penalty imposition, and confiscation of goods in cases of undervaluation and provisional release against bond. The decision serves as a reminder of the Customs authorities' power to levy redemption fines, irrespective of the availability of goods for confiscation, based on the interpretation of relevant laws and judicial pronouncements.