GOUTHAM TRADING CO. Vs. COMMISSIONER OF CUSTOMS CHENNAI

JUDGEMENT

(1.) S.L. Peeran, Member (Judicial) 1. The Appellants are challenging the imposition of fine of Rs. 11.50 lakhs and penalty of Rs.50,000/ - by the Commissioner of Customs in the impugned order on Poppy seeds, weighing 84.43 kgs. valued at Rs. 11,73,405/ - CIF covered under the Bill of Entry No. 51581 dt. 18.10.95 under Section 111(D) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development and Regulation) Act 92. The reason of for ordering confiscation and imposition of penalty by the Customs is that the subject goods "Poppy Seeds" were not imported by the actual user as a raw material for extracting oil, but, imported by the Trader i.e. the Importer, The Ld. Consultant submits that the party is not contesting the merits of the case but would like to confine themselves for waiver of redemption fine and penalty in the matter for the reason that during the relevant period i.e. 94 -95 the appellants were under the bonafide belief that the item is "Ayurvedic drugs" for preparation of Ayurvedic medicines. However, subsequently, the Tribunal held in the case of Janta Ayurvedic Bhawan vs CC reported in 1990 (48) ELT 425 that Poppy seeds are consumer goods of agricultural origin. He submits that during that period the confiscation and fine imposed was only to the extent of 25 to 30%. In the present case, Commissioner has imposed 100% which is not proper and correct. He, further submits that as the entire trade were importing for the purpose of utilising in the manufacture of ayurvedic medicines and hence there was no intention to evade any provision of law and hence penalty is not imposable. He seeks for complete waiver of redemption fine and penalty in the matter. While the Ld. DR submits that due to violation of Import Export Policy the order of confiscation and grant of redemption by imposing fine is justified. He submits that the Larger Bench in the case of Harpreet International vs. CC., Amritsar presided over by the Hon'ble President has laid down that the imposition of Redemption Fine at 85% CIF was proper and correct. In that case, the declared value was Rs. 25.25 lakhs and therefore, the penalty war reduced to Rs. 14 lakhs from Rs. 45 lakhs. He submits that in the present case the value being Rs.11.73 lakhs the penalty ought to have been Rs.2.2 lakhs. However, the Commissioner has imposed nominal penalty of Rs. 50,000/ - He submits that for import being prohibited by the policy; penalty is imposable.

(2.) On a careful consideration of the submissions, we find that there is a sufficient force in the submissions made by the Ld. DR. In the present case, there is no dispute on merits. The only plea raised is with regard to imposition of redemption fine and penalty. Even in terms of the Ld. Consultant's argument, in earlier case, redemption fine was imposed but quantum was less. However, we find that the issue is settled and quantum of redemption fine imposed at 85% of CIF value to be proper. The Ld. Consultant's plea that the Larger Bench fixed redemption fine at 85% of CIF on the import during 96 -97 while their imports pertain as to 1994 is not sustainable. We are not in a position to appreciate this point as the quantum of redemption fine has no relevance to the year of import and the Tribunal has taken into consideration all the judgements to clarify the issue. Therefore, in terms of the Larger Bench judgement, redemption fine imposed in the case, impugned order has to be restricted to 85% of CIF value to be restricted to 85% of CIF value. There is no ground for further reduction of redemption fine or for waiver of penalty. In that view of the matter, the impugned order is modified to the extent that redemption fine has to be restricted only to the extent of to 85% of the CIF value in terms of the Larger Bench decision in the case of Harpreet International vs. CC, Amritsar (supara). The appeal is disposed of in the above terms.

(3.) (Order dicated and pronounced in the open court)