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2017 (7) TMI 671 - AT - CustomsConfiscation of goods - penalties - warehousing of goods - there was some variation in stock position - Held that - appellant has not been able to justify the defence taken by him against imposition of penalties and also confiscation of the goods. It is undisputed that there was some excess stock in the Warehouse and also shortages of the duty free goods brought in for clearances. The said excess and shortage was communicated by the appellant himself to the lower authorities which indicates that there is definitely an error on the part of the appellant to not to reconcile the stocks regularly. Quantum of redemption fine - Held that - considering the fact that the value of confiscated goods found the redemption fine of ₹ 1,50,000/-, seems to be excessive - in order to meet the ends of justice, the redemption fine imposed needs to be reduced, which is fixed at ₹ 75,000/-. Quantum of penalty - Held that - the penalty u/s 114 of CA, 1962 is ₹ 50,000/-, which, in my considered view, is correct and no interference is called for - the first appellate authority reduced the penalty imposed u/s 112 of Customs Act, 1962 from ₹ 1,00,000/- to ₹ 50,000/- which also I find is correct. Appeal allowed - decided partly in favor of appellant.
Issues:
1. Confiscation of goods and imposition of penalties under Customs Act, 1962. 2. Justification of penalties and confiscation by the appellant. 3. Excess and shortage of goods in the Customs Bonded Warehouse. 4. Application of relevant sections of the Customs Act, 1962. 5. Reduction of redemption fine and penalties imposed. Issue 1: Confiscation of goods and imposition of penalties under Customs Act, 1962 The appellant held a Customs Private Bonded Warehouse Licence for storing various goods without payment of customs duty. The appellant offered to extend bonding for the items in bond, but discrepancies in stock were found. The lower authorities confiscated the goods and imposed penalties under sections 114 and 112 of the Customs Act, 1962. The appellant contested the confiscation and penalties, arguing system deficiencies and lack of evidence supporting the actions taken by the revenue authorities. Issue 2: Justification of penalties and confiscation by the appellant The appellant's representative reiterated grounds of appeal, claiming that the excesses and shortages were due to system deficiencies. They argued that the confiscation of duty paid seized goods was based on presumptions without evidence of investigations by Customs. The appellant also contended that certain provisions of the Customs Act were incorrectly applied by the lower authorities and that the goods were never removed from the Warehouse, thus challenging the basis for confiscation and penalties. Issue 3: Excess and shortage of goods in the Customs Bonded Warehouse The appellant admitted to discrepancies in stock and offered to reconcile the same, agreeing to pay differential duty if necessary. The lower authorities seized excess and shortage of goods, leading to the confiscation and imposition of penalties. The appellant's failure to reconcile stocks regularly was noted, indicating errors on their part. Issue 4: Application of relevant sections of the Customs Act, 1962 The first appellate authority made factual findings, confirming the excess and shortage of goods in the Warehouse. The authority applied sections 113(k) and 111(j) of the Customs Act, 1962, in justifying the confiscation and penalties. The appellant's arguments regarding the application of these sections were countered by the authority's findings, upholding the actions taken by the lower authorities. Issue 5: Reduction of redemption fine and penalties imposed While upholding the findings of the lower authorities regarding confiscation and penalties, the appellate tribunal deemed the redemption fine excessive. The tribunal reduced the redemption fine from ?1,50,000 to ?75,000, considering it proportionate. The penalties imposed under sections 114 and 112 of the Customs Act, 1962, were upheld without interference, as they were deemed appropriate by the tribunal. This judgment highlights the importance of maintaining accurate stock records in Customs Bonded Warehouses to avoid discrepancies and potential confiscation of goods. The tribunal's decision emphasizes the application of relevant sections of the Customs Act, 1962, in determining penalties and confiscation, while also ensuring proportionate fines are imposed for violations.
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