2024 (12) TMI 1037 - AT - Customs

Sustainability of duty quantified and confirmed in the impugned order - imposition of redemption fine and penalties on the Appellants. Whether the duty quantified and confirmed in the impugned order is correct and sustainable? - HELD THAT -The Larger Bench of the Tribunal in the case of Bombay Hospital Trust Vs. Commissioner of Customs Mumbai 2006 (6) TMI 117 - BOMBAY HIGH COURT has held that when post importation conditions in an exemption notification are not fulfilled the Department has the power to recover the escaped duty in terms of Section 12 of the Customs Act 1962 - the duty demand in the present case is in order and does not call for any interference. Whether the redemption fine and penalties imposed on the Appellants are justified in the facts of these appeals? - HELD THAT - Hon ble Supreme Court in the case of Weston Components Ltd. Vs CC New Delhi 2000 (1) TMI 45 - SC ORDER has held that Under these circumstances if subsequently it is found that the import was not valid or that there was any other irregularity which would entitle the customs authorities to confiscate the said goods then the mere fact that the goods were released on the bond being executed would not take away the power of the customs authorities to levy redemption fine. - the confiscation of the imported goods for non-fulfilment of the export obligation upheld under the provisions of Section 111(o) and imposition of fine under Section 125 of the Customs Act 1962. Imposition of penalties - HELD THAT - It is found that the Adjudicating Authority has already complied with the earlier order of this Tribunal to show lenience by reducing the penalties imposed to Rs.5, 00, 000/- on the Appellant (A1) and Rs.2, 00, 000/- each on the Appellants (A2 and A3) which cannot be termed to be excessive. As such the impugned Order-in-Original No. 27243/2014 dated 30.06.2014 of the Commissioner of Customs Chennai do not call for any interference and so required to be upheld. Appeal dismissed.

Summary

Issues Involved:

1. Whether the duty quantified and confirmed in the impugned order is correct and sustainable?
2. Whether the redemption fine and penalties imposed on the Appellants are justified in the facts of these appeals?

Issue-wise Analysis:

1. Quantification and Confirmation of Duty:

The Tribunal examined whether the duty quantified and confirmed in the impugned order was correct and sustainable. The Appellant company imported capital goods under the zero duty EPCG Scheme but failed to fulfill the export obligation. The duty on the imported goods was initially assessed at Rs.7,57,80,682/- but was later revised to Rs.7,89,45,622/-. The Appellant contested this revision, asserting that the duty demand should be limited to the bond amount executed at the time of import. However, the Tribunal clarified that the duty payable should be the amount leviable at the time of import, but for the exemption under Notification No. 111/95-Customs. The Tribunal found that the duty demand was in accordance with the law and upheld the quantification as correct and sustainable.

2. Justification of Redemption Fine and Penalties:

The Tribunal addressed the imposition of redemption fine and penalties on the Appellants. The goods were confiscated due to non-fulfillment of export obligations under Section 111(o) of the Customs Act. The Appellant argued that since the goods were not available for confiscation, penalties should not be imposed. However, the Tribunal referred to the precedent set by the Supreme Court in Weston Components Ltd., which allows for the imposition of redemption fine even if the goods are not physically available, provided they were released under a bond. The Tribunal also considered the economic conditions at the time and reduced the penalties, showing leniency as per its earlier order. The penalties imposed were Rs.5,00,000/- on the Appellant company and Rs.2,00,000/- each on the Chairman and Managing Director. The Tribunal found these penalties to be justified and not excessive, thereby upholding the order of the Commissioner of Customs.

In conclusion, the Tribunal dismissed the appeals, affirming the duty demand, confiscation of goods, and the imposition of redemption fine and penalties as per the Customs Act, 1962.