TMI Blog2003 (12) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... ry dated 11-2-2003 wherein the CIF value was per unit was declared US $ 298.83 PMT. The value of the goods were loaded to US $ 303 PMT and the goods confiscated with option to redeem on payment of fine and payment of penalty as above. The appellant's plea is that the fine and penalty are excessive and they seek reduction in fine and penalty to the extent of 20% and 5% of the value determined, in the light of earlier decisions of the Tribunal in the case of Marmo Classic v. CC, Nhava Sheva [2002 (148) E.L.T. 1019 (T)] (Order Nos. C-I/1008-09/WZB/2002, dated 16-4-2002), Jai Bhagwati Impex Pvt. Ltd. v. CC C.E., Goa [2002 (145) E.L.T. 158 (T) = 2002 (48) RLT 199], Mahalaxmi Tile Marble Co. Pvt. Ltd. v. CC, Ahmedabad (Order No. C-I/3603/WZB/2001, dated 12-11-2001) and Akash Stone Industries Others v. CC, Mumbai/Nhava Sheva/Goa [2002 (150) E.L.T. 667 (T)] (Order Nos. C-I/1375-1407/WZB/2002, dated 17-5-2002). We find that the Commissioner has taken the margin of profit considering the market price of subject blocks of Rs. 27,000/-, as 52% of the CIF value based on the formula, MOP - declared CIF value + duty payable on enhanced CIF/declared CIF value. 3.All aspects of the matter h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Honourable Member (Judicial) has been sent to me on 15-9-2003, which I have considered very carefully. However, I am unable to concur with the said order for the following reasons :- (i) In this case, the confiscation of the impugned goods and liability to penalty is not under challenge. As recorded by the Hon'ble Member (J) in Paragraph 2 above, the appellants are merely seeking reduction in redemption fine and penalty to the level of 20% and 5% of the value determined. It has also been recorded therein that the Adjudicating Commissioner has enhanced the declared value from US $ 298.83 PMT CIF to US $ 303 PMT CIF and has determined the margin of profit to be 52% of the CIF value. (ii) The Hon'ble Member (J) has proposed in her order to reduce the fine from Rs. 17,50,000 to Rs. 3,50,000/- and penalty from Rs. 3,50,000/- to Rs. 17,500/- which comes to about 9.5% and 0.5% of the determined value of Rs. 36,11,980/- (The declared value is Rs. 35,62,269/-). Such reduction will leave a huge margin of profit at the hands of the appellants and encourage contravention of import restrictions on the impugned goods and make smuggling of the same a profitable busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Manual. I have carefully perused the decision of the Tribunal in the case of Akash Stone Industries (supra) wherein a reference has been made to the Central Appraising Manual of the Customs Department, Volume V, Chapter 3, Paras 4 and 5 [vide Para 3(c) of the said order] and it has been concluded that fine on marble blocks should be within a norm of 25% and that the same should be binding on the Revenue. With great respect to the Hon'ble Member (T) who has recorded the order in the case of Akash Stone Industries (supra), I must point out that he has overlooked a very specific and relevant guideline contained in the said Central Appraising Manual, Volume V, Chapter 3, Para 4(bb), which reads as follows :- "The fine has to be equal to the norm or the margin of profit whichever is higher." It is, therefore, clear from the above that "levy of fine within the norm of 25%" is not actually set out in the Central Appraising Manual. It is also clear that by ignoring to consider a vital provision in the Central Appraising Manual as contained in the said Para 4(bb) and holding that the Revenue is bound by the norm, the Tribunal's decision in Akash Stone Industries (supra) has been ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also referred to imports by the appellants on a regular basis in deliberate defiance of law. Under the circumstances, the penalty of Rs. 3,50,000/- imposed by the Adjudicating Commissioner which is less than 10% of the determined value of Rs. 36,11,980/-, is not excessive or unreasonable. In my view, the same does not require reduction to Rs. 17,500/- as proposed by the Hon'ble Member (J) as it works out to less than 0.5% of the value determined and would hardly be a deterrent either to the appellants or to any one else in preventing them from breaking the law again. 7.For the reasons stated above, I am of the view that the quantum of fine and penalty imposed by the Adjudicating Commissioner does not require any interference. The appeal is rejected as devoid of any merit. Sd/- (C. Satapathy) Member (T) Dated : 7-11-2003 DIFFERENCE OF OPINION 8.The following difference of opinion is placed before the Hon'ble President for reference to Third Member : Whether the fine and penalty are required to be reduced to 20% and 5% respectively of the CIF value determined for the marble imported by the appellants and the appeal partly allowed, as proposed by Member ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court. The fine in the present case is reasonable, and considering the six earlier imports made by the appellant without licence, the penalty which is less than 10% is also not unreasonable. 12.The Counsel for the appellant conceded that the figures of Rs. 3.50 lakhs and Rs. 17,500/-, being fine and penalty respectively in the order of the Member (Judicial) was erroneous. The value determined of the consignment was approx. Rs. 36.50 lakhs. The fine at 20% of this value therefore would correctly be around Rs. 7.3 lakhs and the penalty at 5%, Rs. 1.8 lakh. The Member (Technical), he says, has not considered these amounts, but has gone by the erroneous amounts shown in the order of the Member (Judicial) on merits, he contends that the earlier orders of the Tribunal determining fine and penalty at these levels have been upheld by the High Court on more than one occasion. The High Court had accepted the Writ Petition No. 4124 of 2002 filed by Marmo Classic and directed the Commissioner to sanction refund by implementing Tribunal's order reducing the fine and penalty to these levels. In large number of cases earlier, the Tribunal has found the fine and penalty at 20% and 5% respectivel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making a profit. He emphasizes that the provisions of the Central Appraising Manual, which the Bench had earlier cited, provided in 1970 that basic articles for which the fine would be 25%, did not include marble. The basic articles listed therein were machinery used in specified industries and specialized raw material and intermediaries. These instructions did not contemplate that raw materials for consumer goods such as marble would be basic articles. He also points to instructions in the Manual that the fine has to be equal to these norms or the margin of profit whichever is higher. 14.Section 125(2) of the Act provides that the fine for redemption of goods ordered to be confiscated cannot exceed the market price of the goods and excise duty payable thereupon. Therefore, any fine that is not in excess of this limit cannot be said to be contrary to law. Similarly, the penalty on the importer will not be illegal if it is within the limits specified by Section 112 of the Act. The margin of profit, which is a contentious issue in this appeal, is only a working rule that the department accepts. The reason for basing fine upon margin of profit is that no importer should benefit fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur loss and keep doing so for quite a long while. There may perhaps be exceptions as in the cases of branded goods where a person may temporarily suffer loss in order to keep the brand name alive in the market. Marble blocks clearly do not fall in this category. It is clear from these facts that the quantum of fine determined earlier has been insufficient to eliminate the profitability of import. The fines determined in the past have thus failed to give effect to the provisions of law prohibiting import of the goods without a licence. It is possible that, as a result of the fines that were earlier fixed, the market price has increased, leading to a continuation of import. If that is what has happened, it is clear that that the market situation has changed, resulting in the earlier levels of fine being lower than the current margin of profit. In that case, too, a higher fine would be called for to cater to the changed situation. The present appellant has himself earlier imported goods six times earlier in 2001-2002 and was permitted to clear them presumably on the basis of penalty lower than that imposed now. It is thus clear that the fine imposed earlier has not acted as deterrent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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