GANAPATHY AGENCIES Vs. CC

JUDGEMENT

(1.) THE appellants imported from Belgium what was declared as "Stainless Steel Coil AISI 304" and, in terms of a high sea sale agreement with one M/s. Manba Enterprises, Chennai, filed a Bill of Entry dated 31.1.2002, a/c. M/s. Manba Enterprises, claiming exemption from payment of duty under DEEC Scheme. The goods were examined, as first check, in the presence of experts from National Metallurgical Laboratory (NML), Chennai. NML, in their report dated 7.2.2002, certified the goods to be of not confirming to AISI 304 grade. However, in response to a requisition from the Department, NML clarified in their letter dated 27.2.2002 that the goods, though apparently of seconds quality in visual examination, still confirmed to AISI 304 grade in terms of chemical composition. Subsequently, the above Bill of Entry was withdrawn and a fresh Bill of Entry for warehousing was filed wherein the goods were declared as "STAINLESS STEEL COIL SECOND QUALITY GRADE AISI 304" and the unit price of the goods was declared as Indian rupee equivalent to USD 1060 per MT. In the wake of this warehousing Bill of Entry, which was filed by the importer after giving up their claim for DEEC benefit, a dispute arose between them and the Department as to whether the goods had been correctly declared in the original Bill of Entry. Apparently, the party waived show -cause notice and after hearing them, learned Commissioner of Customs passed the impugned order, whereby the goods were confiscated under Section 111(m) and (o) of the Customs Act with option for redemption on payment of fine of Rs. 2.50 lakhs. A penalty of Rs. 30,000/ - was imposed on the party under Section 112(a) of the Act. It is submitted by learned consultant today that, subsequent to the date of passing of the impugned order, the importer filed home consumption Bill of Entry declaring the value of the goods at the aforesaid rate (USD 1060 per MT) and obtained clearance of the goods against payment of duty, redemption fine and penalty. It is submitted that there is no dispute with regard to the assessable value of the goods or the amount of duty assessed and paid.

(2.) HOWEVER , learned consultant reiterates the appellants' grievance against redemption fine and penalty. It is submitted that, as the assessee chose to declare the unit price of the goods consistently as USD 1060 and eventually paid duty on that basis, it cannot be said that they had intention to evade payment of duty. It is also submitted that, all throughout, they declared the Stainless Steel Coils as of AISI 304 grade and, in the final report of NML also, this declared grade of the goods was confirmed. In the circumstances, it cannot be said that the goods were misdeclared. Hence, according to learned consultant, it was not correct on the part of the Commissioner to confiscate the goods or to impose penalty. We have heard learned SDR also, who reiterates the findings of the Commissioner.

(3.) THE short question to be considered at this stage is whether the quanta of fine and penalty imposed by learned Commissioner are reasonable. Learned Commissioner imposed a fine of Rs. 2.50 lakhs in lieu of confiscation of goods valued at a little over Rs. 20.00 lakhs. She apparently did not take recourse to the parameters laid down under Section 125 of the Customs Act in the matter of this determination, nor did she take into account the exceptional circumstances of the case. This is a case where the importer withdrew their original home consumption Bill of Entry, wherein there was alleged misdeclaration of goods, with the permission of the proper officer, and filed a fresh Bill of Entry for warehousing. The NML's first report was against the party, but their second report, which was clarificatory to the first, was in their favour insofar as the grade of the goods was concerned. In other words, there was no misdeclaration of grade. The party did not expressly declare the goods as of prime quality, in their original Bill of Entry. In their second Bill of Entry for warehousing, they specifically declared the goods to be of seconds quality, all these having been done when the goods were still under customs custody. When all these factual aspects are taken into account, we are of the view that such a high amount of fine as determined by learned Commissioner is not warranted in this case. We have the same view in relation to the penalty as well. After taking into consideration the aforesaid facts and circumstance of the case, we reduce the quanta of fine and penalty to Rs. 1,00,000/ - (Rupees one lakh only) and Rs.5,000/ - (Rupees five thousand only) respectively. The appeal is allowed only to this extent.