Kargwal Corporation And Others vs C.C Mundra

Ramesh Nair, Member (J)

The Appellant M/s Kargwal Enterprises is engaged in the import of rough limestone blocks and marble blocks. The present appeals are directed against Orders – In – Original which are impugned herein, passed by the adjudicating authority ordering confiscation of goods under section 111(d) of the Customs Act 1962 with an option to redeem the same upon payment of a fine and a penalty under Section 112(a) of the Customs Act 1962.

1.1 The facts in brief are that during the course of business the Appellant imported goods falling under CTH No. 25152090 under Customs Tariff Act, 1982 which were restricted and required a specific import license for the said purpose. That the Appellant had effected the imports within the validity of the license and a total of 6 shipments were delayed and imported post expiry of their license. That the same was intimated to the Commissioner of Customs who upon receipt of the application passed and Orders in Original ordering confiscation of goods under section 111(d) of the Customs Act 1962 with an option to redeem the same upon payment of fine and penalty under Section 112(a) of the Customs Act 1962. That aggrieved by the same the Appellant preferred an appeal along with Stay application for release of goods before this Tribunal. That the Stay was allowed vide order No. S/1368/WZB/AHD/07 dated 29.11.2007 with the direction to deposit Rs. 25 Lakhs and 20 Lakhs respectively in both the matters and to furnish ITC bond for the balance amount of redemption fine which the Appellant fulfilled, whereafter the matter was remanded to decide the case afresh vide Order in Appeal No. A/10912/2015. Subsequent to the Tribunal’s order, de novo Orders-in-original were passed by the Adjudicating Authority.

Hence the present appeals.

Shri Stebin Mathew, learned Counsel Ms. Dishya Pandey learned advocate appearing on behalf of the Appellant submits that the adjudicating authority has not considered the gravity of offence, margin of profit and circumstances of the case before deciding the issue of levy of Redemption fine and penalty. He further submits that the adjudicating authority has disregarded the Appellant’s submission made towards ascertaining the working profit which as claimed by them is only between 5 – 10 percent evidenced by the certification of their chartered accountants whereas the department has projected a profit of 55% without providing any cogent and detailed working. He takes the support of Impact Systems Inc v Commissioner of Customs 2008 (228) ELT 604 wherein the Hon’ble Tribunal has decided that where market enquiries have not been conducted by the adjudicating authority a reduction in redemption fine and penalty may be made to wipe out the margin of profit. He further submits that the Appellant had to incur heavy demurrage and detention charges due to delayed shipment and adjudication proceeding which have not been taken into account by the authorities for which he takes the support of the case of Nhavasheva v Mamo Classic 2003 (156) ELT 14 (Bom). He further submits that since the Appellant had brought into the notice voluntarily about the lapse of their license the Adjudicating Authority should have differentiated them from habitual offenders of illegal imports while levying such huge fine and penalty. He submits that they have relied on the following cases in support of their submission:-

• Sophisticated Marbles & Granite Industries v. Commissioner of Customs Mumbai 2004 (165) ELT 353(T)

• Commissioner of Customs, Chennai v Sagar Enterprises 2011 (264) ELT 101 (T)

• Commissioner of Customs, Mumbai v Vaibhav Exports 2009 (244) ELT 527 (Bom)

Shri Tara Prakash, Learned Deputy Commissioner (AR) on behalf of the department has reiterated findings of the impugned order.

We have carefully considered submissions made by both the sides and perused their records. We find the Appellants plea is that there be reduction in redemption fine and penalty. We observe that the order was placed by the Appellant during the validity of their license wherein out of the total shipments in dispute, Bill of lading bearing No. MSCUS5860867 was issued dated 29.04.2007 and the rest within a month of the same time which we observe is close to the lapse of the license of the Appellant. Furthermore, we note that the Appellant have voluntarily updated the adjudicating authority about the said issue. Taking the said facts into consideration we are of the view that the Appellant is a bonafide as they have not suppressed facts relevant in the present case. We also find that in the present case the appellant suffered heavy demurrage due to which the profit of the appellant has also wiped off. Based on the facts and circumstances in the current case, we are of the view that appellant deserve the leniency with regard to quantum of redemption fine and penalty.

Accordingly, we reduce the redemption fine and penalty in the matter of Appeal No. C/10327/16 to Rs.25,00,000/- and Rs.4,00,000/- respectively and in Appeal No. C/10623/16 to Rs.20,00,000/- and Rs. 3,00,000/- respectively.

The impugned orders are modified to the above extent. Appeals are partly allowed in the above terms.