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2008 DIGILAW 1388 (PNJ)

Jaswant Traders v. Commissioner Of Customs

2008-08-18

HEMANT GUPTA, RAJESH BINDAL

body2008
Judgment Hemant Gupta, J. 1. This order shall dispose of Customs Appeal Nos. 20 and 21 of 2008 arising out of order dated 15-1-2008 passed in Customs Appeal Nos. 686 and 685 of 2007 respectively by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (hereinafter to be referred as the Tribunal. 2. In these two appeals, the appellants, on the basis of separate Bills of Entry dated 12-3-2007 and 8-3-2007, allegedly imported old and used Monitors and CPUs etc. The appellants declared the assessable value of the goods at Rs. 6,59,442/- and Rs. 3,75,206/- respectively in both the Bills of Entry but the Customs Authorities got the goods evaluated from the local Chartered Engineer. The value of the said goods was opined to be Rs. 18,30,488/- and Rs. 9,63,024/- attracting duty of Rs. 3,76,271/- and Rs. 1,97,695/-. The Additional Commissioner of Customs, Ludhiana, ordered the confiscation of goods but gave the appellants an option to redeem the goods on payment of fine of Rs. 6,60,000/- and Rs. 3,00,000/- under Section 125 of the Customs Act, 1962 (hereinafter to be referred as the Act). A penalty of Rs. 2,55,000/- and Rs. 1,80,000/- was also imposed under Section 112 of the Act. The goods were confiscated on the basis of Para 2.17 of Chapter 2 Volume 1 of Foreign Trade Policy 2004-09 whereby import of aforementioned goods is restricted and is only allowed if the same are imported against a valid licence/certificate/permission from the Director General Foreign Trade. 3. In the appeals filed by the appellants, the redemption fine was reduced to Rs. 1,00,000/- and penalty to Rs. 20,000/- respectively. An appeal was filed by the Revenue against the order of Commissioner (Appeals) before the Tribunal. The Tribunal increased the redemption fine and penalty and assessed the same at Rs. 4 lacs and Rs. 1 lac, respectively. It is the said order which is subject matter of present appeal before this Court. 4. Learned counsel for the appellant has vehemently argued that the appellant had not misdeclared the goods in the bill of entry and that there is no mens rea for undervaluation of goods, therefore, the Commissioner (Appeals) was justified in law in reducing the redemption fine and penalty but the Tribunal was not justified in enhancing the same. 5. 4. Learned counsel for the appellant has vehemently argued that the appellant had not misdeclared the goods in the bill of entry and that there is no mens rea for undervaluation of goods, therefore, the Commissioner (Appeals) was justified in law in reducing the redemption fine and penalty but the Tribunal was not justified in enhancing the same. 5. A perusal of the record shows that the appellant vide letter dated 21-3-2007 has accepted the value loaded by the customs. It is also not disputed that the import of such items was restricted in the Import Trade Policy for the year 2004-09. Once the import of goods is restricted i.e., permissible only on the basis of licence to be given by DGFT, the goods in the absence of such licence were liable to be confiscated. There was violation of the Import Policy by the appellant and by virtue of violation of such Import Policy, the goods became liable for confiscation. For such confiscation, mens rea was not required or contemplated as violation of the Import Policy gives rise to confiscation of such imported goods. Once the goods are ordered to be confiscated, the quantum of penalty is within the discretion of the authorities. The reasoning given by the Tribunal in enhancing the penalty is fair and reasonable. The imposition of penalty does not give rise to any question of law. 6. Learned counsel for the appellant has relied upon M/s. Rattan Exports Limited, Delhi v. Collector of Customs, Calcutta, 1987 (31) E.L.T. 66 (S.C.) = (1987) 4 SCC 174; M/s. Nirav International vCollector of Customs, Madras , 1997 (90) E.L.T. 13 (S.C.) = (1997) 10 SCC 722; Super Electronics v.Collector of Customs, Bombay, 2003 (153) E.L.T. 254 (S.C.) = (2003) 11 SCC 446; and Akbar Badruddin Jiwani v. Collector of Customs, Bombay, 1990 (47) E.L.T. 161 (S.C.) = (1990) 2 SCC 203. 7. In Rattan Export Ltds case (supra), the redemption fine and penalty was reduced keeping in view the facts and circumstances of the case when demand raised on account of penalty and redemption fine was found to be excessive. The said decision is in the facts of the case falling within the scope of Article 142 of the Constitution of India and does not lay down any binding principle. 8. In Akbar Badrudin Jiwanis case (supra), the importer has imported marble. The said decision is in the facts of the case falling within the scope of Article 142 of the Constitution of India and does not lay down any binding principle. 8. In Akbar Badrudin Jiwanis case (supra), the importer has imported marble. The question raised was that whether such marble is a restricted item or available for import under Open General Licence. Such import classification was subject to interpretation. The Court found that the burden lies on the Customs Department to show that the importer acted dishonestly or contumaciously or with the deliberate or distinct object of breaching the law. However, in the present case, the fact that import of such items is restricted is not disputed. Therefore, the question of mens rea in importing the goods pales into insignificance as the question is not whether the import is restricted or falls under Open General Licence. In the present case, the goods imported were, without any doubt, restricted goods and, thus, could not have been imported without licence. Therefore, said judgment which is based upon interpretation of nature of goods falling into Open General Licence category or restricted category is not helpful. 9. The reliance of the petitioner on M/s. Nirav Internationals case (supra) is also misconceived as in that case the matter was remanded to the Tribunal. The issue raised before the Court was in respect of valuation of goods by the two Collectors i.e., Collector of Customs, Madras and Collector of Customs, Bombay. The matter was remanded to the Tribunal to examine the Bombay Collectors order. The said judgment is not relevant to the issues raised. 10. InSuper Electronicss case (supra), the goods imported were optical disc drives for the manufacture of radio/cassette recorders. It was the case of the Revenue that optical disc drives could be imported by the manufacturers or actual users and not by the appellant who is manufacturing radio two-in-ones. The Court found that the appellant was having bona fide impression that it was entitled to import the goods in question for industrial use and there was no deliberate attempt on its part to import goods against the policy. However, in the present case, the appellant could not refer to such explanation before Adjudicating Authority which may lead to the inference that there was any bona fide dispute regarding the right of the appellant to import the goods without advance licence. 11. However, in the present case, the appellant could not refer to such explanation before Adjudicating Authority which may lead to the inference that there was any bona fide dispute regarding the right of the appellant to import the goods without advance licence. 11. Since the appeal arises out of the penalty imposed and such imposition of penalty is not proved to be actuated by any extraneous or irrelevant consideration, therefore, we do not find that any question of law much less a substantial question of law arises for consideration by this Court. 12. Consequently, both the appeals are dismissed.