1 In all these appeals, the challenge is against the quanta of redemption fine and penalty. The appellants had imported various quantities of fresh garlic and sought clearance thereof under Bills of Entry filed at various points of time during the EXIM policy period 1997-2002. They declared the goods as 'garlic' and their values in terms of the invoices issued by their foreign suppliers. The goods were of Chinese origin. The customs authorities found that the goods were covered under ITC (HS) Heading No. 070320.00, which required specific licence for import. The importers could not produce any such licence.
The authorities, therefore, took a view that the goods were liable to confiscation under Section 111(d) of the Customs Act. When proceedings were accordingly proposed against the appellants, they waived show cause notice and requested for expeditious disposal of the matter, having regard to the perishable nature of the consumer goods. The adjudicating authorities concerned ordered confiscation of goods under Section lll(d) ibid with option for redemption thereof or payment of fine under Section 125 of the Act. Penalties were also imposed on the parties under Section 112(a) of the Act. Hence these appeals.
2. Heard both the sides. Ld. Counsel for the appellants do not seriously challenge the confiscation of the goods inasmuch as, admittedly, the imports were made without the necessary import licence, attracting Section 111(d) ibid. The challenge is only against the quantum of redemption fine and the quantum of penalty in each of these appeals. Ld. Counsel submit that any market enquiry was not conducted by the adjudicating authorities so as to be able to determine redemption fine in terms of Section 125. It is further submitted that the fine and penalty determined under Section 125 and Section 112 respectively do not disclose any intelligible nexus to the value of the goods. The yard stick applied by the adjudicating authorities is not uniform. Even in a case where there was no misdeclaration of value, a high redemption fine was imposed. Ld. Counsel further point out that any determination of fine without reference to the market price of the goods and the margin of profit in the sale of the goods cannot be sustained. In respect of penalty also, it is contended that no reasonable basis has been disclosed in any of the impugned orders. Ld.
Counsel rely on the decision of the Tribunal rendered in the case of Commissioner of Customs, Mumbai v. Auto World - 2000 (122) E.L.T. 500 and also the decision of the Tribunal's Larger Bench in Neesha Plast Industries v. Commissioner of Customs, Mumbai - 2000 (118) E.L.T. 255.
In the case of Auto World, it was held that it was necessary on the part of the adjudicating authority to state reasons for arriving at a particular quantum of fine to be imposed in the facts and circumstances of the case. In the case considered by the Larger Bench, it was noted that the adjudicating authority had imposed a redemption fine which was 200% of the value of the confiscated goods and also that the fine was imposed without any discussion on the margin of profit. The Larger Bench reduced the fine from 200% to 100% of the value. Correspondingly the penalty imposed by the lower authority on the importer was reduced from Rs. 65,000/- to Rs. 40,000/-. Relying on these decisions, counsel pray for reduction of fine and penalty in these appeals.
3. DR has provided us with a chart showing, inter alia, the quanta of redemption fine and penalty as percentages of the value of the goods and redemption fine respectively. The correctness of the data contained in this chart is not disputed. Relying on this data, DR submits that neither the quantum of fine nor that of penalty in any of these cases can be considered to be unreasonable. It is the further submission of the DR that the appellants have no case that the quantum of redemption fine exceeds the maximum limit prescribed under Section 125. As regards penalty, it is contended that the quantum of penalty cannot be considered to be exorbitant vis-a-vis the value of the goods. Section 112 authorizes the adjudicating authority to impose penalty up to a maximum of 5 times the value of the goods. The penalty imposed in each of these cases is far below that limit.
4. We have carefully considered the submissions. For the sake of convenience, we shall choose a few sample cases out of the list furnished by ld. DR. In one case [C/520/2001] redemption fine and penalty have been imposed by the adjudicating authority on the sole ground that the goods were imported unau-thorisedly without necessary import licence. There is no finding of mis-declaration in that case.
The redemption fine imposed in that case, as per the chart, works out to 11.8% of the value of the goods and the penalty imposed on the importer works out to 25% of the redemption fine. In another case [C/273/2002], a misdeclaration was also found by the adjudicating authority, which enhanced the value from US $ 435 to US $ 450 PMT. In this case, the redemption fine is 19.6% of the enhanced value and the penalty is 22.2% of the redemption fine. We find that there are numerous similar examples of this case before us. There are also a few cases in which the value has been enhanced by 10 US $ PMT and redemption fine has been imposed in the range of 12% to 18% of the value and penalty has been imposed at around 25% of the redemption fine. After a glance through the structure of the quanta of redemption fine and penalty imposed by the adjudicating authorities, we observe that no definite yardstick is seen to have been employed. However, we also note that, in these appeals, the impugned orders were passed by different adjudicating authorities. It has come out from the arguments of both the sides that certain amount of discretion is involved in the determination of quanta of redemption fine and penalty. It has been submitted by ld. DR that the different imports were made at different points of time and therefore there could be different market conditions influencing the redemption fine under Section 125. Yet another aspect which we consider relevant is that, in all these cases, the requirement of show cause notice under Section 124 was dispensed with at the instance of the importers. Sections 124 and 125 have to be read together. The market enquiry leading to the determination of redemption fine is some thing which ensues from the proceedings originating from the show cause notice under Section 124. The importers, having waived their right to be show-caused, should be held to have waived the enquiry as well. They cannot now turn around and say that market enquiry was not conducted for the purpose of determining redemption fine. As a matter of fact, it has been conceded by ld. Counsel that the appellants wanted the matter to be disposed of as expeditiously as possible and hence waived their right under Section 124. It therefore appears from the record that the adjudicating authorities determined the redemption fine on the basis of the data available on record and having regard to the facts and circumstance of the case. This appears to be true in the case of penalty also. It is also observed that the confiscability of goods has never been in challenge. Once the liability of the goods to confiscation under Section lll(d) is conceded, redemption fine will follow and, in a case where show cause notice is dispensed with at the instance of the importer, there should be a leverage for the adjudicating authority. In the present appeals, none of the appellants has brought on record the landed value of the goods or the margin of profit earned by them. These are data which are in the hands of the importers. The records do not bear testimony to disclosure of any such data to the adjudicating authority. In this context, it is pertinent to note that, in none of these appeals, there is any ground that the statutory maximum limit of redemption fine was exceeded by the fine determined by the adjudicating authority. In such circumstances, we would prefer to follow the precedent of taking into account the totality of the facts and circumstances of the cases for the purpose of testing the reasonableness of the quanta of redemption fine and penalty determined by the adjudicating authorities. Accordingly, we reject the appeals on merits but, having regard to the facts and circumstances, reduce the quanta of redemption fine and penalty as under:-