CESTAT Reduces High-Pitched Redemption Fine against Goods Confiscated u/s 111(d) of Customs Act [Read Order]

Recently in a judgment,  the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) of Allahabad reduced the high-pitched redemption fine imposed on an assessee, Tinna Rubber & Infrastructure Ltd., against goods confiscated under Section 111(d) of the Customs Act.

The assessee, Tinna Rubber, imported two consignments of used and cut tyres, designated for recycling, to their Panipat unit in Haryana. Although the company held a “No Objection” certificate from the Ministry of Environment, Forests, and Climate Change (MOEF) and a DGFT authorization, these permissions were specific to their Wada plant in Maharashtra. Customs authorities flagged this discrepancy, asserting that the permissions did not extend to the Panipat unit. They issued a confiscation order, arguing that the goods, valued at Rs. 22 lakhs, were improperly imported and thus subject to penalties.

The Joint Director of MOEF clarified that the authorization for one plant could not apply to other facilities without specific mention, reinforcing that each unit's permissions were distinct. Customs officials at ICD Loni, responsible for the Panipat import, maintained that the hazardous waste import regulations prohibited the movement of restricted goods like tyre scraps without proper authorization. Consequently, the Joint Commissioner initially imposed a redemption fine of Rs. 6 lakhs and a penalty of Rs. 4 lakhs.

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The assessee, however, contended that this was a technical oversight, and they argued for leniency, asserting that their operations span multiple plants with a centralized import management system. They also argued that the fines were disproportionately high, given that the issue involved only a procedural oversight without any intention of misuse or unauthorized sale of goods.

Upon reviewing the case, the Tribunal, led by members Mr. P.K. Choudhary and Mr. Sanjiv Srivastava, acknowledged the oversight and clarified that while the goods were indeed subject to confiscation under Section 111(d), the fines were excessive considering the nature of the violation. Thus, it reduced the redemption fine to Rs. 3 lakhs and the penalty to Rs. 2 lakhs, providing partial relief to the assessee.

To Read the full text of the Order CLICK HERE

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