The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) directed the Commissioner to reduce the redemption fine under the Customs Act, 1962 as the delay of consignment occurred due to the non-availability of the vessel.
Specta Decor Pvt. Limited, the appellant filed a Bill of Entry dated 11.03.2016 for clearance of 530 MT of hot dipped galvanized steel coils of varying sizes with values ranging between USD515-540/MT.
The DGFT introduced a minimum import price for iron and steel goods classifiable under chapter 72 of ITC (HS) and as per serial No.121 of the annexure to the said notification, the minimum import price for goods classifiable under CTH 72104900 is USD 643/MT.
The Bill of Lading No.955520430 with regard to the above bill of entry indicated that the goods under import were shipped on board the vessel on 08.02.2016. The said imports were also not covered by a letter of credit entered into before the date of issue of notification, the consignment will not fall under the category of the goods exempted from the scope of the said notification.
The Commissioner held that the goods were liable for confiscation under Section 111(d) of the Customs Act 1962 read with Section 3(3) of the Foreign Trade (Development and Regulation) Act ( FTDR ) Act 1992. The goods were allowed to be redeemed on payment of a fine of Rs.15,00,000/-.
Counsel submitted that the appellants had placed orders with the supplier in December 2015 against the proforma Invoice dated 22.12.2015 by making advance payment of USD 34731.11 on 29.12.2015 and USD 18468.89 on 15.01.2016 total USD 53200 was made to the supplier.
It was submitted that due to non-availability of vessel on said day the containers could be loaded only on 08.02.2016.
Further submitted that the Commissioner acknowledged these mitigating circumstances which were beyond the control of the appellant and refrained from imposing any penalty on the appellant. Since the contract for the purchase and payment were effected much before the issuance of notification and since the notification exempts import consignment under letter of credit a lenient view needs to be taken.
It was argued that they are a 100% EOU unit that is eligible to import raw materials duty-free and also imports under advance authorization are exempted from the purview of notification 38/2015-2020 dated 05.02.2016.
On the other hand, the department submitted that since the goods are liable for confiscation the redemption fine imposed on them is justified. The appellant admits to the fact that Section 3 of the FTDR Act, under which the notification 38/201520 is issued provides the Central Government powers Under Section 3 of the FTDR Act, to issue orders to regulate imports as well as exports.
The Tribunal in in the case of Gamesha Renewable Power Pvt. Ltd. Vs. Commissioner of Customs held that the Commissioner was justified in imposing redemption fine.
Considering the unforeseen circumstances explained by the appellant, the two-member Dr D M Misra, Member (Judicial) and Mrs R Bhagya Devi, Member (Technical) directed to reduce the redemption fine to Rs.8,00,000/- (Rupees Eight Lakhs Only) and partially allowed the appeal.
Raghunatha Karnavar appeared for the Appellant and K Vishwanatha, Authorised Representative appeared for the Respondent
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