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Issues: Alleged unauthorized import of spectacle frames in knocked down condition due to cancellation of Advance Release Order by DGFT leading to confiscation and imposition of redemption fine.
The appeal dealt with the issue of alleged unauthorized import of spectacle frames in knocked down condition following the cancellation of an Advance Release Order by the Directorate General of Foreign Trade (DGFT). The Advance Release Order dated 28-6-96 was revoked due to the revocation of the advance license itself, even though it pertained to another party. As a result, the goods were considered not covered by any import license, leading to the confiscation of the goods and the imposition of a redemption fine. The Order-in-Original dated 18-7-96 confiscated the goods and imposed fines of Rs. 5 lacs and Rs. 2,36,000 in two separate Bills of Entry, which were later reduced by the Commissioner (Appeals) to Rs. 1,30,000 and Rs. 70,000, respectively. The declared CIF values of the goods in the Bills of Entry were Rs. 5,21,000 and Rs. 2,46,639. The DGFT had revoked the Advance License on 7-7-96. The appellant's counsel argued for a further reduction in the redemption fine, contending that they had imported the goods in good faith under the belief that they had the necessary legal authority, especially since they possessed an Advance Release Order issued by the DGFT. The counsel attributed any mistake to the DGFT for issuing the release order after the show cause notice. Additionally, the counsel highlighted that due to the heavy redemption fine, a portion of the goods remained unsold in the market, justifying the request for a further reduction in the fine. The respondent's representative argued that the current quantum of the redemption fine, which amounted to about 25% of the CIF value, was fair based on the calculations of profit margins. The representative emphasized that no additional evidence had been presented to warrant a further reduction in the fine. It was stated that the imposition of the redemption fine is typically determined by the profit margin, calculated using established formulas related to market prices and landed costs. The appellants failed to provide evidence to dispute the realism of the 25% profit margin imposed. The tribunal carefully reviewed the arguments presented by both parties and examined the submissions and documents provided by the appellants. It was noted that the company had sold 70% of the imported goods by a certain date and that a portion of the stock remained unsold as slow-moving inventory. Despite the appellants' assertions regarding profit margins, the tribunal found no direct correlation between the company's overall profit margin and the profit margin applicable to the imported goods. Moreover, lacking additional evidence on market prices or profit margins, the tribunal upheld the Commissioner (Appeals)'s decision to reduce the redemption fine by about 70%. Ultimately, the tribunal dismissed the appeals, finding no grounds to overturn the impugned order-in-appeal due to the absence of substantial evidence regarding market prices and profit margins.
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