While disposing 17 appeals together by a common order, the CESTAT Bangalore, recently held that imposition of redemption fine and penalty cannot exceed 10% and 5% the value of imported goods.
The sole grievance of the appellants in the instant case was that the Revenue had imposed redemption fine of more than 10% of the value of the goods in few cases and penalty of more than 5% of the value of goods. The appellants submitted that the same was not sustainable in law and is contrary to the consistent decisions of various Benches of the Tribunal and the High Court.
The bench observed that it is settled legal position that power of discretion by the authority is to be exercised based on well founded principles and should not be done in a mechanical way.
In view of the Bombay High Court decision, which was followed by the Tribunals in a catena of decisions, the bench held that imposition of redemption fine and penalty cannot exceed 10% and 5% the value of imported goods. However, the bench upheld the confiscation of imported goods with an option to the appellant to redeem the same on payment of redemption fine of 10% of the value of the goods and penalty of 5% of the value of goods.
Read the full text of the Order below.
