1997 (5) TMI 269 - AT - Customs

Summary

Issues:
Confiscation of goods under Customs Act, 1962, assessment of goods value, imposition of redemption fine and penalty, contravention of EXIM Policy, adequacy of redemption fine and penalty, lack of response from respondents, need for objective assessment in fixing redemption fine and penalty.

Analysis:
The judgment by the Appellate Tribunal CEGAT, Madras involved four appeals by the revenue concerning a common issue of confiscation of goods under the Customs Act, 1962. The lower authority had confiscated goods and imposed redemption fines and penalties due to undervaluation of imported goods and contravention of EXIM Policy. The revenue contested the adequacy of fines and penalties imposed by the lower authority, arguing that heavier fines were warranted given the profit margins of the importers. The Central Board of Excise & Customs reviewed the case and found the fines and penalties to be low compared to profits made by importers in similar cases.

The department contended that the lower authority did not provide a basis for determining the redemption fine and penalty, despite finding violations of the law. The absence of responses from the respondents led to the appeals being considered in their absence. The Tribunal acknowledged the confiscability of goods and the undisputed enhancement of goods' value but focused on the adequacy of the penalty. It emphasized the need for an objective assessment in determining fines and penalties, considering market values and deterring future violations.

The Tribunal noted the lack of market inquiries and objective criteria in the lower authority's decision-making process. It highlighted the importance of penalties reflecting the advantage gained from unauthorized transactions and serving as a deterrent for future violations. The Tribunal found the lower authority's orders lacking in proper assessment and remanded the matters for fresh consideration, emphasizing the necessity of objective evaluation and affording respondents a personal hearing.

In conclusion, the appeals were allowed by remand, indicating the need for a more thorough and objective assessment in determining redemption fines and penalties in cases of confiscable goods under the Customs Act, 1962. The judgment emphasized the importance of deterring unauthorized transactions and ensuring that penalties are commensurate with the violations committed.