Case Law Details
Genuine Copier System Vs Commissioner of Customs (CESTAT Chandigarh)
In a decision offering partial relief to an importer, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh, has significantly reduced the redemption fine and upheld a lower penalty amount on a consignment of imported used digital multifunction devices. The tribunal, in the case of Genuine Copier System Versus Commissioner of Customs (Customs Appeal No. 60465 of 2023, dated 07.05.2025), applied a judicial precedent to cap the redemption fine at 10% of the re-determined value of the goods.
The case involved M/s Genuine Copier System importing 116 units of “Old & Used Digital Multifunction Device with Standard Accessories and Attachment” from the USA. The importer initially self-assessed the goods under Tariff Item No. 84433100 of the Customs Tariff Act, 1975.
Following a first check examination, customs authorities, with the assistance of a Chartered Engineer, determined that the declared value was understated. The value was subsequently enhanced and finally fixed at Rs. 31,13,620/-.
The original adjudicating authority accepted this re-determined value but also imposed a redemption fine of Rs. 15,56,810/- and a penalty of Rs. 1 Lakh. While the importer accepted the enhanced value to avoid further delays and costs, they challenged the quantum of the redemption fine and penalty, arguing they were excessive.
The importer’s appeal to the Commissioner (Appeals) was unsuccessful, leading them to file the present appeal before CESTAT.
Before the tribunal, the appellant’s counsel contended that the sole ground of appeal was the reduction of the redemption fine and penalty. The counsel cited the Larger Bench judgment of the Tribunal in the case of Marque Enterprises Vs Commissioner of Customs (Preventive), Amritsar – 2015 (329) ELT 307 (Tri. Del.). This precedent, according to the appellant, established that in similar cases, the redemption fine should be restricted to 10% of the value of the goods and the penalty to 5% of the declared value. The appellant urged the tribunal to decide the appeal in line with this established principle.
The learned Authorized Representative appearing for the respondent (Commissioner of Customs) reiterated the findings of the impugned order passed by the Commissioner (Appeals).
The CESTAT, after considering the arguments from both sides and reviewing the case records, noted that the re-determined value of Rs. 31,13,620/- had been accepted by the appellant.
The tribunal observed that the imposed redemption fine of Rs. 15,56,810/- was indeed excessive. Citing the Larger Bench decision in Marque Enterprises, the tribunal held that the redemption fine should be reduced to 10% of the re-determined value. Applying this percentage to the re-determined value of Rs. 31,13,620/-, the tribunal accordingly restricted the redemption fine to Rs. 3,11,362/-.
Regarding the penalty of Rs. 1 Lakh, the tribunal found that this amount was already below 5% of the re-determined value. Consequently, the tribunal saw no reason to interfere with the penalty amount as imposed by the original authority.
In light of these findings, the CESTAT partly allowed the appeal, modifying the redemption fine while upholding the penalty. The operative part of the order, pronounced in open court, confirmed the restriction of the redemption fine to Rs. 3,11,362/- and maintained the penalty at Rs. 1 Lakh.
This ruling underscores the application of judicial precedents by the tribunal in determining the quantum of redemption fine and penalty, providing a degree of predictability and uniformity in such cases. The decision offers a significant reduction in the financial burden on the importer concerning the redemption fine, aligning it with the principles laid down in previous judgments.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
The present appeal is directed against the impugned order dated 08.02.2023 whereby the Commissioner (Appeals) has rejected the appeal of the appellant and upheld the Order-in-Original.
2. Briefly the facts of the present case are that the appellant imported 116 units of “Old & Used Digital Multifunction Device with Standard Accessories and Attachment” imported from the USA. The goods were self-assessed under the Tariff Item No.84433100 of the Customs Tariff Act, 1975. They were ordered to be examined on first check basis before clearance. Thereafter, the goods were examined and the services of Shri Anil Kumar, Chartered Engineer was taken to determine the description and value of the imported goods. As per the reports of the Chartered Engineer, it was found to be on the lower side and it was enhanced and finally determined for Rs.31,13,620/-. Thereafter, the original authority confirmed the re-determined value and also imposed the redemption fine of Rs.15,56,810/- and penalty of Rs. 1 Lakh. In order to avoid the damage and detention charges, the appellant accepted the enhanced value but challenge the redemption fine and the penalty as the same was on the higher side. Thereafter, the appellant filed appeal before the Commissioner and the Commissioner (Appeals) rejected the appeal of the appellant. Hence, the present appeal.
2. Heard both sides and perused the material on record.
3. Learned Counsel appearing for the appellant submits that the only ground of appeal in the present case is the imposition of redemption fine and penalty which should be reduced in view of the various decisions of the Tribunal and the High Courts. He further relied upon the judgment of the Larger Bench of the Tribunal in the case of Marque Enterprises Vs Commissioner of Customs (Preventive), Amritsar – 2015 (329) ELT 307 (Tri. Del.) wherein it has been held that after considering various decisions of the Tribunal vide majority that redemption fine should be restricted to 10% of the value of the goods and the penalty to the extent of 5% of the declared value. He prays that in view of the judgment of the Larger Bench, the appeal may be decided.
4. On the other hand, learned AR reiterates the findings of the impugned order.
5. After considering the submissions of both the parties and perusal of the material on record, I find that the re-determined value of the goods was Rs.31,13,620/- which was accepted by the appellant. Further, I find that the imposition of redemption fine of Rs.15,56,810/- is excessive and in view of the Larger Bench’s decision cited supra, it should be reduced to 10% of the re-determined value which is Rs.31,13,620/-. As regards the penalty of Rs. 1 Lakh, I find that it is already below 5% of the re-determined value therefore I do not disturb the said finding which does not require any interference.
6. In view of the above, I restrict the redemption fine to the extent of Rs.3,11,362/- and penalty of Rs. 1 Lakh.
7. Accordingly, the appeal is partly allowed in the above terms.
(Operative part of the order pronounced in the open court)
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