Redemption Fine Not Justified on Re-Exported Goods Due to Supplier's Mistake: CESTAT [Read Order]
The tribunal accepted that the fault lay with the supplier, not the importer, and consequently set aside both the redemption fine and the penalty.
re – exported – goods – Taxscan
re – exported – goods – Taxscan
The Mumbai Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the redemption fine was not justified on goods re-exported due to the supplier’s mistake.
Durga Computers,appellant-assessee,filed a Bill of Entry on 04.05.2019 for importing Hynix 2GB DDR2 800 RAM. The goods were cleared on 07.05.2019. On 08.05.2019, Customs found that the RAM had different stickers reading “Hynix 2GB DDR2 PC2 6400U Korea.”
The proprietor later stated that the wrong goods were sent by the supplier. During the hearing on 04.02.2020, the assessee submitted a letter from the supplier admitting the mistake and agreeing to take the goods back. The assessee also agreed to re-export the goods.
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The original authority, by order dated 11.02.2020, allowed re-export but imposed a redemption fine of ₹3,00,000 and a penalty of ₹2,00,000. The Commissioner (Appeals) upheld the order on 25.01.2022. The assessee then challenged the decision before the tribunal.
The assessee counsel said the original authority noted a letter from the supplier dated 04.02.2020, stating the supplier was ready to take back the goods. She said the appellant paid the redemption fine and penalty and re-exported the goods on 07.11.2020.
Read More: No Redemption Fine when Goods allowed to be Re-Exported: CESTAT
She argued that once re-export is allowed, redemption fine should not be charged. She relied on a tribunal decision in Skylark Office Machines vs. Commissioner of Customs, which supported this. She also said the wrong goods were sent by mistake of the supplier, who agreed to take them back, so penalty should not be imposed on the importer.
The department’s representative said the assessee agreed to pay the fine and penalty to get permission for re-export.
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A single member bench of Anil G.Shakkarwar (Technical Member) reviewed the case and noted that the original authority recorded that the supplier had agreed to take back the goods. The goods were assessed through the Bill of Entry, and Customs had passed an out-of-charge order.
The appellate tribunal pointed out that the law on imposing a redemption fine on goods allowed to be re-exported was settled by earlier decisions, including one from this bench in Skylark Office Machines. That decision said if goods are allowed for re-export, no redemption fine can be imposed.
Based on this, the CESTAT set aside the redemption fine in this case. It also accepted the assessee’s argument that the fault was with the supplier, not the assessee, and therefore removed the penalty of Rs. 2,00,000/- that was imposed.
In short,the appeal was allowed.
To Read the full text of the Order CLICK HERE
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