S.S.P. INTERNATIONAL Vs. COMMR. OF CUS.

JUDGEMENT

(1.) IN all these appeals, the challenge is against the quanta of redemption fine and penalty. The appellants had imported various quantities of fresh garlic and sought clearance thereof under Bills of Entry filed at various points of time during the EXIM policy period 1997 -2002. They declared the goods as 'garlic' and their values in terms of the invoices issued by their foreign suppliers. The goods were of Chinese origin. The customs authorities found that the goods were covered under ITC (HS) Heading No. 070320.00, which required specific licence for import. The importers could not produce any such licence. The authorities, therefore, took a view that the goods were liable to confiscation under Section 111(d) of the Customs Act. When proceedings were accordingly proposed against the appellants, they waived show cause notice and requested for expeditious disposal of the matter, having regard to the perishable nature of the consumer goods. The adjudicating authorities concerned ordered confiscation of goods under Section lll(d) ibid with option for redemption thereof or payment of fine under Section 125 of the Act. Penalties were also imposed on the parties under Section 112(a) of the Act. Hence these appeals.

(2.) HEARD both the sides. Ld. Counsel for the appellants do not seriously challenge the confiscation of the goods inasmuch as, admittedly, the imports were made without the necessary import licence, attracting Section 111(d) ibid. The challenge is only against the quantum of redemption fine and the quantum of penalty in each of these appeals. Ld. Counsel submit that any market enquiry was not conducted by the adjudicating authorities so as to be able to determine redemption fine in terms of Section 125. It is further submitted that the fine and penalty determined under Section 125 and Section 112 respectively do not disclose any intelligible nexus to the value of the goods. The yard stick applied by the adjudicating authorities is not uniform. Even in a case where there was no misdeclaration of value, a high redemption fine was imposed. Ld. Counsel further point out that any determination of fine without reference to the market price of the goods and the margin of profit in the sale of the goods cannot be sustained. In respect of penalty also, it is contended that no reasonable basis has been disclosed in any of the impugned orders. Ld. Counsel rely on the decision of the Tribunal rendered in the case of Commissioner of Customs, Mumbai v. Auto World - 2000 (122) E.L.T. 500 and also the decision of the Tribunal's Larger Bench in Neesha Plast Industries v. Commissioner of Customs, Mumbai - 2000 (118) E.L.T. 255. In the case of Auto World, it was held that it was necessary on the part of the adjudicating authority to state reasons for arriving at a particular quantum of fine to be imposed in the facts and circumstances of the case. In the case considered by the Larger Bench, it was noted that the adjudicating authority had imposed a redemption fine which was 200% of the value of the confiscated goods and also that the fine was imposed without any discussion on the margin of profit. The Larger Bench reduced the fine from 200% to 100% of the value. Correspondingly the penalty imposed by the lower authority on the importer was reduced from Rs. 65,000/ - to Rs. 40,000/ -. Relying on these decisions, counsel pray for reduction of fine and penalty in these appeals.

(3.) DR has provided us with a chart showing, inter alia, the quanta of redemption fine and penalty as percentages of the value of the goods and redemption fine respectively. The correctness of the data contained in this chart is not disputed. Relying on this data, DR submits that neither the quantum of fine nor that of penalty in any of these cases can be considered to be unreasonable. It is the further submission of the DR that the appellants have no case that the quantum of redemption fine exceeds the maximum limit prescribed under Section 125. As regards penalty, it is contended that the quantum of penalty cannot be considered to be exorbitant vis -a -vis the value of the goods. Section 112 authorizes the adjudicating authority to impose penalty up to a maximum of 5 times the value of the goods. The penalty imposed in each of these cases is far below that limit.