Case Law Details
Brief facts
It has been held in case of Commissioner Of Customs (Import) V/s. M/S. Finacord Chemicals (P) Ltd. & Ors. it was held by supreme court that, In August, 1991, respondent herein imported certain containers of alcohol under the description “Undenatured Ethyl Alcohol’ (Malt Spirit plus or minus 59.3% Vol.) from an intermediary, M/s. Ravco International Ltd., England (hereinafter referred to as ‘RIL'(for short). As per the Department, these imports were under invoiced at pound 1.40 per litre whereas the actual price of the said goods was pound 3.78 per litre. This led to issuance of a show cause notice dated 28.09.1992 upon the importers/respondents herein. It was alleged that the correct transaction value of the imported goods was pound 3.78 per bulk litre and that the goods were imported against invalid licenses. Accordingly, demand of customs duty was raised against respondent. It also proposed confiscation of the goods and penal action against the respondents. The Collector of Customs vide Order-in-Original dated 28.02.1995 upheld the mis declaration and undervaluation.
Aggrieved, the respondents filed appeals before the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as ‘CESTAT’) and the CESTAT vide its final order dated 10.09.2003, partly allowed the appeals thereby setting aside the order of the Collector regarding enhancement of the unit price, while upholding that import of the said goods was unauthorised and was liable for confiscation. However, the CESTAT reduced the amount of fine imposed and set aside the penalties imposed on the respondents. Hence the present Appeals.
Held by Hon’ble Supreme Court of India
The Hon’ble Supreme Court stated that as far as the first issue of import price of the liquor in question is concerned, the order of the Collector reveals that the respondents-assessee have relied upon a letter indicating that the goods were imported at the rate of UK pound 1.40 per bulk litre. After discussing elaborately, the Collector rejected the authenticity or evidentiary value of the said letter. However, apart from this letter, the respondents had also produced invoices and in these invoices price of UK
Pound 1.40 per bulk litre is specifically mentioned. The Collector has not taken into account or considered the import of these invoices. On the other hand, the CESTAT has remarked and rightly so, that when the invoices are produced showing the purchase price of the goods in question and authenticity of these invoices is not doubted by the Department, these will form as the primary evidence in support of the contention of the respondents that the imported goods were purchased at UK pound 1.40 per bulk litre. The Hon’ble Court thus, do not find any flaw in the reasoning of the CESTAT while deciding this issue.
The Hon’ble Court further stated that insofar as the reduction of redemption fine as well as the penalty is concerned, the CESTAT has given the following reasons in doing
So: –
“Redemption Fine
In view of our finding on issue (i) that the goods are liable to confiscation as they have been imported without cover of a valid licence. We hold that levy of fine is warranted. However we note that for the first time in the case of Bussa Overseas Properties Ltd. Vs. CC(I) Mumbai 2002(148) ELT 328, the Tribunal held that over-proof whisky having more than 55% alcohol content by vol. is a concentrate of alcoholic beverages and until this decision, a practice to allow clearances of similar goods under REP licence was prevalent. We also note that a long period has lapsed since the import and that the goods are raw materials for manufacture of alcoholic beverages that this is not a case of duty evasion as the finding on undervaluation has on set aside by us thereby reducing the gravamen of the charge. The assessable value of the goods imported by FCPL is Rs.15,08,040/- while the assessable value of the goods imported by SRN is Rs.22,78,578/-. The fine levied by the Commissioner on FCPL is Rs.51,62,413/- and that of SRN is Rs.22,65,006/-. We are not able to fathom the logic behind fixing the above quantum of fines. There is nothing in the impugned order to indicate the basis on which the quantum was arrived at. Having regard to the above factors including the fact that the import Policy was liberalised subsequently and that only the charge of ITC violation has been sustained by us, we reduce the fine levied on FCPL to Rs. 10 lakhs and on SRN to Rs. 15 lakhs.”
The Hon’ble Court stated that the CESTAT has given valid reasons for reducing the penalty and fine and the discretion exercised by the CESTAT on valid considerations does not call for any interference.
In view of the above the appeal is dismissed.
