TMI Blog2015 (9) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... ion were defective and also having paid duty without any protest, appellant cannot turn around now and say that goods are prime and not defective – Survey report also indicates that goods were heavily rusted and they were not prime quality – Provisions of Section 111(m) are clearly attracted and confiscation of goods upheld – Redemption fine is imposed to wipe out profit margin which appellant would have made in case appellant had been able to clear goods on basis of declaration – Appellant had sold goods at below cost and has not made any profit in transaction – In these circumstances, no justification for imposition of redemption fine. For imposition of penalty under Section 114A, there should be collusion or any wilful misstatement or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and defectives). The consignment was inspected and during the course of inspection, it was noticed that the goods were not as per the order/sales contract made with the foreign supplier. The goods coveted under the bill of entry was examined by the docks staff and it was observed that out of declared 71 bundles of Hot Rolled Non Alloy Steel Sheets, only 6-7 bundles had the metal labels affixed on them giving details of description, steel grade, specification, coil number, weight, size, date, etc. The total number of plates were found to be 202 as against the declared quantity of 209 plates. The goods were found to be heavily rusted and improperly bundled. The subject goods, from a visual inspection, were found to be seconds and not of prime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2002 and sought provisional release of the goods which was allowed on execution of bond and bank guarantee. Thereafter, a notice was issued to the appellant proposing to deny the benefit of Notification No. 21/2002, dated 1-3-2002 by treating the goods under importation as defective/seconds and demanding differential duty of ₹ 28,70,641/-. It was also proposed to confiscate the goods under the provisions of Section 111(m) of the Customs Act, 1962 and also to impose penalties on the appellant under Sections 114A/112(a) and on the Partner of the appellant firm, Shri Bijal Shah, under Section 112(a). The notice was adjudicated vide impugned order and the duty demands were confirmed. The goods were confiscated under Section 111(m) and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he pleads for allowing the appeal. 4. The ld. Addl. Commissioner (AR) appearing for the Revenue reiterates the findings of the adjudicating authority. 5. We have carefully considered the rival submissions. 5.1 We have perused the statement given by the Partner of the appellant firm during the investigation, wherein the appellant had after examination of the goods agreed that the goods were not prime metal but heavily rusted and defective. The appellant had also admitted that he would pay differential duty without claiming the benefit of Notification No. 21/2002 and accordingly he had discharged the differential duty liability also without any protest. The appellant had not filed any retraction letter with respect to the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 111(m) are clearly attracted and the confiscation of the goods is upheld. 5.3 Coming to the redemption fine of ₹ 45 lakhs imposed on the appellant under Section 125 of the Customs Act, redemption fine is imposed to wipe out the profit margin which the appellant would have made in case the appellant had been able to clear the goods on the basis of declaration. In the present case, from the documentary evidence submitted before the adjudicating authority as well as before us, it is seen that the appellant had sold the goods at below cost. In other words, the appellant has not made any profit in the transaction. Even otherwise when the goods supplied are seconds/defective against a purchase contract for prime metal, the question of ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the foreign supplier without realizing that the goods imported was not in conformity with the purchase order placed by him. There is no admission of any suppression or wilful misstatement of facts in the statement given by the Partner of the appellant firm. Therefore, we hold that the charge of collusion, wilful misstatement or suppression of facts is not established. Therefore, the provisions of Section 114A are not attracted and accordingly, we set aside the penalty imposed on the appellant under Section 114A of the Customs Act, 1962. 6. In sum, we uphold the confirmation of duty demand and denial of Notification No. 21/2002, dated 1-3-2002. We set aside the redemption fine of ₹ 45 lakhs and the penalty of ₹ 74,26,264/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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