2. (a) Appellants are aggrieved by the order of Commissioner of Customs Central Excise, Goa, who on their import of old and used diesel engines enhanced the values and imposed redemption fines and penalties as follows:----------------------------------------------------------------Description Enhanced Redemption PersonalOf Goods Value Fine Penalty--------------------------------------------------------------Engines 5,03,977/- 5,04,000/- 51,000/-Seats 10,000/- 2,500/- 1,000/--------------------------------------------------------------- The import was made in March 2000. The Ld. Advocate for the appellants does not press the loading of the valuation and appeal on that issue is therefore dismissed.
(b) As regard the redemption fine and penalties it is found that the Bench of this Tribunal in the case Sagar Auto Works[ 2004 (163) ELT 442] had held that Commissioner should determine the margin of profit by his own enquiries before proceeding to decide that goods under importing need a redemption fine in excess of that stipulated in the Customs Appraising Manual and he has to specifically arrived at findings as to how and why such fine being determined by him should be more than the 'norms' as prescribed by the Board and Manual instruction. In the present case it was pointed out by the Ld. Advocate that the Commissioner has taken cognizance of the importer submission as regards the value of recondition engines and margin of profit of only 15% as well as the fact that DGFT has recently issued specific import licenses of 4000 Diesel Engines on production of special import licences to the tune of three times the value of the imported goods and that the cost of obtaining such special licences would be only 3% of the face value. However from the findings arrived the Commissioner it could be seen has not given any reasons as to why these submissions made do not merit a consideration. He has come to the conclusion .......
"On the other hand, the Department has done a market enquiry and has determined the MOP of about 100% in respect of used Diesel Engines.
The Department has also proposed MOP of about 25% for Used Car Seats. I am also persuaded by the Order of Hon'ble CEGAT, WZB No. 75-76/97- WZB dated 7.1.98 in respect of Nank Trading Co. v. CC, Mumbai in the matter of imposition of fine and penalty on Used Diesel Engines where fine was 100% of the value and penalty of 10% thereof has been considered reasonable and appropriate. I have also considered that in view of the recent price hike of about 40% on the Diesel price, which would make such Engines uncompetitive as compared to other Automobile Engines of different fuels leading to possible reduction of Margins." and therefore he has imposed a redemption fine of 100% and penalty of 10%. The order does not take into consideration the important fact that the decision of the Bombay High Court in Writ Petition No. 1767/99 making it mandatory for vehicles to convert from diesel engine and LPG as pleaded by the Ld. Advocate before us. This consequence of this writ petition order would obviously result in reduction in demand for use of such imported material in Automobile Sector if the items are so intended and devised. The margin of profit would thus reduce. In any case the material on the market enquiries, said to have been conducted, by the Commissioner and relied by him do not find part of the show cause notice as relied upon documents. Orders relying upon material no disclosed and not considering the material submitted by defence are to be set aside. In view of the fact, that this Tribunal had arrived at redemption fine vide the above said decision in the case of Sagar Auto Works and others that fine at 45% of enhanced value and penalty at the enhanced value 5% to be sufficient and taking cognizance of the submission made by the Ld. Advocate that this order of the Tribunal has been accepted by the Commissioner, inasmuch as the refund consequent to that order have been sanctioned, no reasons are found to sustain the high redemption fine of 100% in the order of imports of March 2000 as in this case based on imports made many years earliers.
(c) Following the earlier decisions of this Tribunal in the case of Sagar Auto Works and others orders that appeal is required to be allowed, following the earlier orders of determining the redemption fine at 45% and penalty at 5% as no case is made out to sustain the fines and penalties, at the levels as arrived at by the Commissioner.
(d) The plea of the Ld. DR that there are no fetters on the redemption fine required to be imposed but the provisions of Section 125 of the Customs Act, 1962, are well taken. But the adjudicator cannot also violate with infirmity the instructions with Appraising Mannual & Boards order. The higher fines and penalties, if justified could be imposed. However justification for the same to should emerge from the orders and not to be sought elsewhere. The order in this case does not speak or to supports any such justification.
3. In view of the findings herein above, appeals allowed partly by reducing the fine and penalty to 45% and 5% of the determined values.
Which are not pressed in appeal, therefore not disturbed.