CESTAT Reduces Redemption Fine and Penalty 10% & 5% on Unlicensed Import of Used Clothing Citing Sufficiency in Meeting Justice [Read Order]
Finding the penalties sufficient to meet justice, the CESTAT reduced the redemption fine and penalty for the unlicensed import of used clothing
![CESTAT Reduces Redemption Fine and Penalty 10% & 5% on Unlicensed Import of Used Clothing Citing Sufficiency in Meeting Justice [Read Order]](https://www.taxscan.in/wp-content/uploads/2024/10/CESTAT-CESTAT-Kolkata-CESTAT-Reduces-Redemption-Fine-CESTAT-Reduces-Penalty-Import-of-Used-Clothing-Taxscan.jpg "CESTAT Reduces Redemption Fine and Penalty 10% & 5% on Unlicensed Import of Used Clothing Citing Sufficiency in Meeting Justice [Read Order]")
The Kolkata Bench Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) reduced the redemption fine and penalty to 10% and 5%, respectively, for the unlicensed import of used clothing. The Tribunal deemed these reduced penalties sufficient to uphold justice. Ess Ess Overseas, the appellant is a Delhi-based importer, imported a shipment of old and used worn clothing that was...
The Kolkata Bench Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) reduced the redemption fine and penalty to 10% and 5%, respectively, for the unlicensed import of used clothing. The Tribunal deemed these reduced penalties sufficient to uphold justice.
Ess Ess Overseas, the appellant is a Delhi-based importer, imported a shipment of old and used worn clothing that was fully fumigated. The declared value of the goods was set at $1.10 per kg, but customs authorities believed this to be undervalued and adjusted it to $1.316 per kg.
Transform Your GST Knowledge: Comprehensive Course - Enroll Now
The goods were classified under Tariff Item No. 63090000, a category restricted under the Foreign Trade Policy 2009-2014, requiring a specific import license that the company did not possess. Due to the lack of the required license, customs authorities confiscated the goods, imposing a 30% redemption fine and a 10% penalty on the assessed value.
Aggrieved, the appellant appealed to the Commissioner of Customs (Appeals), who reviewed the case and reduced the penalties. The redemption fine was lowered from 30% to 10% and the Penalty was reduced from 10% to 5% of the assessed value.
Dissatisfied with the reduced penalties, the Customs Department filed an appeal with the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), seeking to reinstate the original fines.
Transform Your GST Knowledge: Comprehensive Course - Enroll Now
The two-member bench comprising Ashok Jindal ( Judicial Member ) and Mr.K.Anpazhakan ( Technical Member ) observed arguments from both the revenue and the importer. The Tribunal referenced a similar case in Venus Traders vs. Commissioner of Customs (Import), Mumbai, which held the confiscation of goods due to the lack of an import license but reduced the redemption fine to 10% and the penalty to 5% of the assessed value, citing procedural irregularities in the customs valuation process.
Therefore, the tribunal concluded that the reduced fines were reasonable and upheld the Commissioner of Customs (Appeals)' decision to set the redemption fine at 10% and the penalty at 5%.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
