Custom, Excise & Service Tax Tribunal
Cc, Chennai vs M/S. S.C. Shah Enterprises on 18 July, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
C/199/2008
(Arising out of Review Order-in-Original No. 5/2008-2009 dated 25.04.2008, passed by the Commissioner of Customs, Chennai).
For approval and signature
Honble Shri P.K. DAS, Judicial Member
Honble Shri MATHEW JOHN, Technical Member
____________________________________________________
1. Whether Press Reporters may be allowed to see the : Yes
order for Publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether the Honble Member wishes to see the fair : Seen
copy of the Order.
4. Whether order is to be circulated to the : Yes
Departmental Authorities? __________________________________________________________
CC, Chennai : Appellants
Vs.
M/s. S.C. Shah Enterprises : Respondent
Appearance Shri P. Arul, Supdt., for the appellants Shri S. Venkatachalam, Adv., for the respondents CORAM Honble Shri P.K. Das, Judicial Member Honble Shri Mathew John, Technical Member Date of Hearing : 18.07.2013 Date of Decision: 18.07.2013 ORDER No._______________ Per: Mathew John The respondent herein imported Stainless Steel Coils declaring it to be prime quality and paid the rate of duty applicable for prime quality stainless steel coil of 5% BCD + 16% CVD + various cesses. The Revenue on examination of the goods felt that the goods were secondary quality. For goods of secondary quality, the rates of duty applicable were 10% BCD+16%+ various cesses. Revenue drew samples and sent it to the National Metallurgical Laboratory (NML), Chennai, for their opinion. NML reported that based on visual inspection and chemical analysis the materials in the containers could be considered as secondary/defective rejected stainless steel AISI 304/304 L Grade coils. When this report was pointed out to the respondents, the respondents stated that they do not want to drag the issue because the clearance is getting delayed and they are ready to pay the rate of duty as applicable to the goods of secondary quality and the case may be decided without issue of show cause notice. Accordingly, the Commissioner after giving a hearing to the respondent, adjudicated the matter vide the impugned order under which goods valued at Rs.54,03,602.56, was confiscated under Section 111 (d) of the Customs Act, 1962. He imposed a nominal redemption fine of Rs. 15,000/- under Section 125 of the Customs Act, 1962. Further, he imposed a penalty of Rs.10,000/- under Section 112 (a) of the Customs Act, 1962. The Revenue is aggrieved that the redemption fine and penalty imposed are very low considering the value of the goods. Hence, the present appeal before the Tribunal.
2. Arguing for the Revenue, the Ld. AR submits that the appellants unconditionally accepted mis-declaration, that implied differential duty of Rs. 3,37,113/-. For such offense the redemption fine and penalty is very low. He further points out that vide letter dated 11.02.08, the respondents had accepted the NML Report reporting the goods as seconds and defective and stated that they were ready to pay the merit duty as applicable.
3. He relies on the decision of the Tribunal in the case of Jagdamba Tin Suppliers Vs. CC, New Delhi 2012 (276) ELT 383 (Tri.-Del.), wherein goods valued at Rs. 16,23,286/- were confiscated and allowed to be redeemed on payment of redemption fine of Rs.75,000/- and a penalty of Rs. 50,000/- was imposed as per the Tribunals Order. His prayer is that the nominal redemption fine and penalty as per the adjudication order may be modified by increasing the fine and penalty.
4. Opposing the prayer, the Ld. Advocate submits that according to their letter dated 11.02.08, the goods have already suffered heavy demurrage and it was economical to pay higher rate of duty and clear the goods rather than drag the issue. Further, he points out that the value of the goods declared in the bill of entry corresponded to the value of the prime quality. Thus, on prime quality value the appellants paid higher rate of duty where as on prime quality goods duty payable was lower. Thus, when the appellant accepted to pay duty on the merit rate appellant already suffered high payment of duty and further they suffered demurrage and retention charges and loss of business opportunity due to delay in clearance of goods for about 4 months. Considering all these facts, the Commissioner has imposed a nominal fine and penalty. Therefore, the adjudicating order may not be interfered with.
5. Considered the arguments of both sides. The stand of the respondents for early closure of the matter was appreciated by the Commissioner and he has shown leniency while imposing redemption of fine and penalty, taking into account other facts like demurrage and detention charges which are also relevant for determination of redemption fine. Further we note that the respondent has already suffered by paying higher rate of duty on the value of prime quality steels whereas if goods were actually of prime quality the incidence where lower or if the goods were seconds then value would have been lower which also would have resulted in payment of lower amount of customs duty. So it is case of double whammy. In the circumstances, we do not to interfere with the order of the Commissioner.
6. Accordingly, the appeal filed by the Revenue is rejected.
(Order dictated and pronounced in the open Court)
MATHEW JOHN P.K.DAS
Technical Member Judicial Member
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