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2015 (5) TMI 800 - MADRAS HIGH COURT

2015 (5) TMI 800 - MADRAS HIGH COURT - 2015 (325) E.L.T. 555 (Mad.) - Imports in violation of the Exim Policy - Deterrent penalty - Tribunal set aside penalty - Non speaking order - Held that:- Goods were contracted and shipped on 01.08.2004, i.e., when the import of second-hand machinery was not permitted. However, the bill of entry was filed on 09.09.2004. The importer taking advantage of the new Foreign Trade Policy, 2004-09, submitted that at the time of filing bill of entry, new policy had .....

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reason why the Tribunal had reduced the fine and set aside the entire penalty. - Tribunal has not passed a speaking order justifying the reduction of fine and setting aside the penalty. Hence, we have no other option except to remand the matter back to the Tribunal to reconsider the issue afresh - Decided in favour of Revenue. - Civil Miscellaneous Appeal No. 2057 of 2011 & M.P.No.1 of 2011 - Dated:- 30-4-2015 - R. Sudhakar And K. B. K. Vasuki,JJ. For the Appellant : Mr. Vikram Ramakrishnan For .....

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) of the Customs Act, 1962 without giving any reasons, when the adjudicating authority imposes deterrent penalty in order to stop the imports in violation of the Exim Policy (2002-2007)? (ii) Whether the Customs, Excise and Service Tax Appellate Tribunal was justified in reducing the redemption fine imposed under Section 125 of the Customs Act, 1962 without giving any reasons, when the adjudicating authority imposes fine in order to stop the imports in violation of the Exim Policy (2002-2007)?&q .....

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007. Since the goods were imported without any licence, the same were confiscated under Section 111(d) and (m) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (D&R) Act, 1992 and penalty was imposed under Section 112(a) of the Customs Act. Since the importer insisted for early adjudication by waiving the show-cause notice and personal hearing, the Adjudicating Authority, vide order-in-original, confiscated the goods with an option for redemption thereof on payment of a f .....

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led an appeal before the Tribunal. The Tribunal after considering the submissions made remanded the matter back to the Commissioner (Appeals) for fresh disposal after examining the issue in terms of Section 111(d) of the Customs Act. On remand, the Commissioner (Appeals), re-adjudicated the order and upheld the confiscation, redemption fine and penalty. The importer pursued the matter before the Tribunal. The Tribunal passed an order reducing the redemption fine and setting aside the penalty hol .....

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issioner (Appeals) regarding contravention of Section 111(m). 3. As regards contravention of Section 111(d), the issue stands settled as the relevant date for determination of violation of law is the date of shipment of the goods as held by the Tribunal in Soni Ispat Ltd. Vs. Commissioner of Customs (Import), Nhava Sheva [2007 (217) E.L.T. 274 (Tri.-Mumbai) which has been upheld by the Hon'ble Bombay High Court's decision reported in 2008 (229) E.L.T. A.182 (Bom.) [the Revenue's appe .....

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al reducing the fine and cancelling the penalty, the Department is before this Court. 4. Heard learned standing counsel appearing for the appellant and the learned counsel appearing for the Department and perused the materials placed before this Court. 5. Since the issue involved in this appeal centers around Sections 111(d), 111(m) and 112(a) of the Customs Act, it is apposite to extract the same for better clarity: "SECTION 111. Confiscation of improperly imported goods, etc. The followin .....

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baggage with the declaration made under section 77 in respect thereof, or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to sub-section (1) of section 54;" 6. Section 112 of the Customs Act provides for imposition of penalty, which reads as follows: SECTION 112. Penalty for improper importation of goods, etc. Any person, - (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods l .....

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he time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to a penalty not exceeding the duty sought to be evaded on such goods or five thousand rupees, whichever is the greater; (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafte .....

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th under clauses (ii) and (iii), to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest. 7. A plain reading of Section 112 of the Customs Act makes it clear that once confiscation is ordered, levy of penalty is automatic. 8. In the present case, the goods were contracted and shipped on 01.08.2004, i.e., when the import of second-hand machinery was not permitted. How .....

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. Commissioner of Customs (Import) and reduced the redemption fine from ₹ 3.00 lakhs to ₹ 50,000/- and set aside the entire penalty. There is no reason why the Tribunal had reduced the fine and set aside the entire penalty. 10. This Court in the case of Commissioner of Customs (AIR), Chennai V. A.P.Pinherio reported in 2014 (306) E.L.T. 349 (Mad) 2014 306 ELT, while upholding the penalty, held as follows: "12. We have perused the show cause notice as well as the order of the Ori .....

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