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Challenge to redemption fine and penalty determination. Analysis: The appeal before the Appellate Tribunal CESTAT, Chennai involved a challenge to the redemption fine and penalty imposed by the Commissioner of Customs on the imported second-hand machinery. The appellants did not contest the valuation of the goods or their liability for confiscation but focused solely on the reasonableness of the redemption fine and penalty. The Tribunal considered the similarity between this case and a previous case involving M/s. Sai Shakti Enterprises where the redemption fine and penalty were modified by the Tribunal. In both cases, the machinery was over ten years old, valued based on a Chartered Engineer's Certificate, and the parties did not dispute the confiscation liability. The main contention was the lack of consideration of the Margin of Profit in determining the redemption fine by the Commissioner. The Tribunal noted that the Commissioner had not appropriately exercised discretion in determining the fine and penalty under the relevant sections of the Customs Act. Considering the excessive nature of the redemption fine in comparison to the value of the goods, the Tribunal decided to reduce the redemption fine from Rs. 16 lakhs to Rs. 8 lakhs, aligning with the approach taken in the Sai Shakti Enterprises case. Similarly, the penalty was reduced from Rs. 8 lakhs to Rs. 1,50,000 to maintain consistency with the previous case. By making these modifications, the Tribunal affirmed the Commissioner's order with the adjusted redemption fine and penalty. In conclusion, the appeal challenging the redemption fine and penalty determination was disposed of by the Tribunal with the modifications reducing the quantum of the redemption fine and penalty, bringing it in line with the principles applied in a similar previous case.
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