CESTAT Reduces Excessive Penalty Imposed for Confiscation of Prohibited Goods on Ground of Consideration of “Minimum Import Price” [Read Order]

The Hyderabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) reduced the excessive penalty imposed for the confiscation of prohibited goods on the ground of consideration of Minimum Import Price. 

Sterling Agro Products, the appellant assessee imported Arecanut with declared assessable value vide Bill of Entry and claimed exemption under Notification. 

The assessee appealed against the order passed by the Commissioner for imposing a penalty by holding that since no said exemptions were available in the case of Arecanut and the imports were below the Minimum Import Price (MIP), the same was considered as “prohibited goods” and liable for confiscation in terms of Section 111(d) of Customs Act,1962. 

Senthil Nathan, the counsel for the assessee contended that there was no malafide intention nor any misdeclaration/misclassification, the penalty appears to be excessive and perhaps based on the value indicated in the show cause notice. 

Further submitted that the penalty imposed for the confiscation of goods was not as per the law and liable to be deleted. 

P. Amresh, the counsel for the department relied on the decisions made by the lower authorities and contended that the penalty imposed for the confiscation of goods was as per the law and liable to be sustained. 

The Bench observed that the goods were for job work by Export Oriented Unit on a “free of cost” basis and therefore a notional value was indicated. Thus, in view of relevant facts, the penalty imposed appears to be excessive. 

A single-member bench comprising A.K Jyotishi (Technical) reduced the penalty to Rs. 2,00,000/- (Two Lakhs) from Rs. 10,00,000/- (Ten Lakhs). 

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