Assessee paid Excise Duty, Sought for Mutilation of Goods before Clearance on Bonafide Imports:  CESTAT reduces Redemption Fine and Personal Penalty u/s 112 [Read Order]

The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that reduced the redemption fine and personal penalty under section 112 of the Customs Act, 1962 when the assessee paid excise duty and sought for mutilation of goods before clearance on bonafide Imports.

Veer Enterprise, the appellant filed Bill of Entry No. 2751547 at Customs House which was assessed to duty on a second check basis. On examination, the goods were initially found to be new Aluminium, Extrusion doors and panels as against the description of Aluminium Extrusion Scrap (trade) given under the Bill of Entry.

A redemption fine of Rs. 3,50,000/ was imposed along with a penalty of Rs. 1,00,000/- by the joint Commissionervides Order-InOriginal and on appeal, same was upheld rejecting party’s contention of contradictory reports, request for examination by chartered Engineer by the department and acceptance of their own Chartered Engineer’s certificate. The Commissioner (Appeals) found the Chartered Engineer Certificate produced by the party was not proper as the same was drawn at the back of the Customs department and could not be relied upon.

It was evident that the initial mutilation request was given by the party on 24.06.2011 and later on waiver of show cause notice andof personal hearing was also given and goods were finally cleared under a Tariff Heading proposed by the department. It was contended that the imposition of redemption fine and penalty on the ground that there was no fault of theirs and the department failed to mutilate the goods before the clearance.

A Coram comprising Mr Raju, Member (Technical) and Mr Somesh Arora,  Member (Judicial)  observed that the party had requested mutilation of the imported consignment to indicate their bona fides which does not appear to have been considered by the department view of their acceptance of the department’s stand exhibited through a waiver of show cause notice as well as clearance of the consignments.

Further viewed that the party has already paid duty under the Tariff Heading proposed by the department and also shown its bona fides after the import as they sought mutilation of goods before the clearance.  The Tribunal reduced the redemption fine to Rs. 1,00,000/- and the personal penalty under Section 112 to Rs. 10,000/-. 

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