Custom, Excise & Service Tax Tribunal
M/S. H.T. Company vs Cc, Hyderabad on 18 January, 2013
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench - SMB
Court I
Date of Hearing:18/01/2013
Date of decision:18/01/2013
Appeal No.C/618/2009
(Arising out of Order-in-Appeal No.85/2009(H-II)Cus dt. 16/10/2009 passed by CC,CE&ST(Appeals), Hyderabad)
For approval and signature:
Honble Mr. P.G. Chacko, Member(Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. H.T. Company
..Appellant(s)
Vs.
CC, Hyderabad
..Respondent(s)
Appearance Mr. B. Venugopal, Advocate for the appellant.
Ms. Sabrina Cano, Superintendent(AR) for the respondent.
Coram:
Honble Mr. P.G. Chacko, Member(Judicial) FINAL ORDER No._______________________ In this appeal filed by the assessee, the challenge is only against the quanta of fine and penalty determined by the Commissioner(Appeals). In an order passed by the original authority pursuant to a remand order of this Tribunal (Final Order Nos.125 to 128/2008 dt. 19/02/2009 in appeal Nos.C/179, 180, 216, 217 and 228/2006), certain goods imported by the assessee way back in September 2005 were confiscated in terms of Section 111(d) of the Customs Act with option for redemption against payment of fine of Rs.30,000/- under Section 125 of the Act. Besides this, a penalty of Rs.50,000/- was also imposed on the assessee under Section 112(a) of the Act. The original authority, for purposes of payment of duties of Customs by the assessee, adopted CIF value of Rs.62,362/- as the assessable value of the goods in terms of Tribunals remand order. Aggrieved by the quanta of fine and penalty determined by that authority, the assessee preferred an appeal to the Commissioner(Appeals) and the latter reduced them to Rs.20,000/- each. The assessee is still aggrieved by the fine and penalty of Rs.20,000/- each, which are said to be excessive in the facts and circumstances of this case. In his endeavour to further the case of the assessee, the learned counsel submits that the authorities below failed to exercise their discretion on sound principles. As regards redemption fine, it is submitted that no market enquiry was conducted by the Department, nor any margin of profit estimated for the purpose of determining quantum of fine under Section 125 of the Act. As regards the penalty imposed on the assessee, it is submitted that this penalty was determined without having regard to clause (ii) of Section 112 of the Act. This submission of the counsel is on the premise that the goods imported by the assessee were not in the category of prohibited goods.
2. The learned counsel has also claimed support from a few decisions of this Tribunal:-
(a) Sree Ambal Expo Inc. Vs. CC, Chennai [2003(155) ELT 346 (Tri. Chennai)]
(b) Abdul Kareem Poku Vs. CC, Cochin [2012(279) ELT 468 (Tri. Bang.)]
(c) Starlite Components Ltd. Vs. CCE, Nashik [2012(286) ELT 43 (Tri. Mumbai)]
3. The learned Superintendent(AR), per contra, submits that the goods imported by the appellant without specific licence required under the relevant Foreign Trade Policy are to be treated as prohibited goods and this aspect must govern determination of the quanta of fine and penalty. It is submitted that the import in question is the 7th of its kind and that the appellant did not produce any licence for clearance of the past six imports also. It is submitted that this aspect prevailed on this Tribunal when it upheld confiscation and rejected the importers claim of concessional quanta of fine and penalty (10% and 5% respectively) in the aforesaid remand order. With regard to the penalty, the learned Superintendent(AR) submits that its quantum should be governed by clause (i) of Section 112 of the Act.
4. After considering the submissions, I find a consensus between the two sides on one crucial point, which is that a discretion was available to the lower authorities in determining the quanta of fine and penalty. In the remand order under reference, this Tribunal required both the quanta to be determined in accordance with law. It also made it clear that the importer was not entitled to concessional quanta of fine and penalty at 10% and 5% respectively of the assessable value of the goods. The CIF value of the goods viz. Rs.62,362/- was adopted as the assessable value by the original authority and the same was not questioned by the assessee. The original authority determined fine at Rs.30,000/- which was reduced by the appellate authority to Rs.20,000/-. The original authority determined penalty at Rs.50,000/- which was reduced by the appellate authority to Rs.20,000/-. The learned Commissioner(Appeals), while reducing the quanta of fine and penalty was exercising his discretion in accordance with law. The appellant has not categorically pleaded that the discretion was illegally exercised. The scope of interfering with such exercise of discretion is limited for the Tribunal.
5. I have considered the decisions cited by the learned counsel. In all the cited cases, the quanta of fine and penalty were reduced by this Tribunal in exercise of its discretion in the peculiar facts of the cases. It is not the case of the appellant that the facts of the present case are similar to those of any of the cited cases. Therefore, there is no question of following the cited case law like Euclids theorem.
6. It is not in dispute that the goods in question were imported without the requisite licence. It is not the case of the appellant that the goods were freely importable and that is why they have not challenged the order of confiscation. The legal requirement of a specific licence for importation of the goods is a restriction which amounts to prohibition. Therefore, the goods imported by the appellant should be considered as prohibited goods for purposes of determination of both fine and penalty. It is also undeniable that the appellant had the same modus operandi in the past. There were six imports in the past and, in all those cases, the goods were confiscated for want of import licence. Even after that, on the 7th occasion, the appellant chose to claim clearance of similar goods without producing import licence. This would show that, over the period, the appellant developed mens rea to a cognizable extent. It is certainly a matter factored into determination of quanta of fine and penalty. In this view of the matter, I have not found any good reason to interfere with the quanta of fine and penalty determined by the lower appellate authority. In any case, the instant case is covered by clause (i) of Section 112 of the Customs Act inasmuch as the goods involved are prohibited goods. If that be so, the quantum of penalty should be somewhere between Rs.5000/- and the value of the goods (Rs.62,362/-). It appears, the learned Commissioner(Appeals) determined fine at Rs.20,000/- in a fair and sound exercise of discretion. However, his order does not disclose any reason as to why a penalty equal to fine was determined in this case. It is an age-old practice that a penalty under Section 112 of the Act be quantified below the amount of fine determined. Considering the facts and circumstances of this case, I am of the view that the penalty on the appellant can be reduced to Rs.7,500/-. With this modification, the impugned order is sustained.
7. The appeal is disposed of in the above terms.
( Pronounced and dictated in open court ) ( P.G. CHACKO ) MEMBER (JUDICIAL) Nr 7