C.C.-Mundra Vs Gamesa Renewable Pvt Ltd (CESTAT Ahmedabad)
CESTAT Ahmedabad held that higher redemption fine and penalty imposable as appellant is a repeated offender and is violating the Minimum Import Price (MIP) condition prescribed by DGFT frequently.
Facts- Siemens Gamesha Renewable Power Pvt. Ltd were engaged in import of “Prime hot rolled steel plates shotblasted/ coated with Zinc Silicate” falling under Tariff Heading No. 72103092.
Notification No. 38/2015 dated 05.02.2016 issued by Directorate General of Foreign Trade (DGFT) prescribed Minimum Import Price (MIP) of Iron and Steel under Chapter 72 of ITC (HS), 2012-Schedule-1 (Import Policy). In the said notification at Serial No. 125 the subject goods were subjected to Minimum Import Price (MIP) of US $ 643 per MT. The importer namely Gamesha Renewable Power Pvt. Ltd (GRPL) imported the said goods declaring a price of US $ 398 per MT. As against, the Minimum Import Price prescribed by DGFT US $ 643 Per MT. The goods were confiscated by the original adjudicating authority for violating of import policy. The original adjudicating authority revised the assessable value of the goods based on Minimum Import Price and demanded Customs Duty on the said revised price. The original adjudicating authority also imposed a redemption fine amounting to Rs. 3 Crores and imposed penalty of Rs. 1 Crores under Section 112(a) of Customs Act, 1962.
Commissioner (Appeals) came to the conclusion that the assessable value cannot be revised on account of Minimum Import Price fixed by DGFT. Relying on the decision of Tribunal in appellants own case, the Commissioner (Appeals), revised the redemption fine and penalty drastically on the lower side on the ground that CESTAT in its earlier order had done the same. Being aggrieved, revenue has preferred the present appeal.
Conclusion- It is noticed that the appellant has been regularly importing by violating the Minimum Import Price (MIP) condition prescribed by the DGFT. It is noticed that the original authorities have been imposing redemption fine roughly equal to the amount of differential duty demanded. However, the Tribunal in the earlier cases had reduced the redemption fine and personal penalty by 90%. The impugned order in the instance case has followed the earlier order of Tribunal and reduced the redemption fine and personal penalty by 90% relying on the Tribunal order in appellant’s own case. It is noticed from the pattern of continuing violation that the redemption fine and penalty imposed earlier are not discouraging the repeat of offence. It is seen that the appellants continue to violate the import policy in respect of Minimum Import Price with impunity. The amount of redemption fine and penalty imposed in terms of the earlier order of the Tribunal does not seem to be discouraging to the appellant from violating the import policy provision. In this instant case this is sixth violation of the policy by the appellant. The severity of violation is also gradually increasing. The redemption fine imposed earlier has not deterred the appellant from violating the policy.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
This appeal has been filed by the Revenue against the reducing in redemption fine and penalty imposed on the respondents.
2. Siemens Gamesha Renewable Power Pvt. Ltd were engaged in import of “Prime hot rolled steel plates shotblasted/ coated with Zinc Silicate” falling under Tariff Heading No. 72103092. Notification No. 38/2015 dated 05.02.2016 issued by Directorate General of Foreign Trade (DGFT), Department of Commerce, Ministry of Commerce & Industry prescribed Minimum Import Price (MIP) of Iron and Steel under Chapter 72 of ITC (HS), 2012-Schedule-1 (Import Policy). In the said notification at Serial No. 125 the subject goods were subjected to Minimum Import Price (MIP) of US $ 643 per MT under Customs Tariff Heading No. 72103090. The importer namely Gamesha Renewable Power Pvt. Ltd (GRPL) imported the said goods declaring a price of US $ 398 per MT. As against, the Minimum Import Price prescribed by DGFT US $ 643 Per MT. The goods were confiscated by the original adjudicating authority for violating of import policy. The original adjudicating authority revised the assessable value of the goods based on Minimum Import Price and demanded Customs Duty on the said revised price. The original adjudicating authority also imposed a redemption fine amounting to Rs. 3 Crores and imposed penalty of Rs. 1 Crores under Section 112(a) of Customs Act, 1962.
3. The Commissioner (Appeals) relying on the earlier order of Tribunal in the case of Crystal Granite & Marble Pvt. Ltd vide Order No. A/11657- 11659/2018 dated 06.08.2018 came to the conclusion that the assessable value cannot be revised on account of Minimum Import Price fixed by DGFT. Relying on the decision of Tribunal in appellants own case, the Commissioner (Appeals), revised the redemption fine and penalty drastically on the lower side on the ground that CESTAT in its earlier order had done the same.
4. This appeal has been filed by the Revenue. It has been argued by the learned AR that the redemption fine imposed by the original adjudicating authority was proper. It has been argued that by learned AR that the grounds of reduction of redemption fine and penalty are not elaborated in the order of Commissioner (Appeals) who has merely stated that looking at the gravity of offence and the earlier order of Tribunal the redemption fine and penalty has been revised downwards. He argued that it could not have been done after having observed that, the goods are liable to confiscation and that the respondents have violated the provisions of imported policy deliberately. It has been argued that in terms of Section 125 of Customs Act, 1962 the redemption fine cannot be exceed the market price of the goods confiscated less the amount of duty chargeable thereon, so as neutralize any benefit that may accrue to the importer from such illegal act of importation of impugned goods. It has been argued that the adjudicating authority has imposed redemption fine amounting to 17.98% of the declared transaction value and only 6% on the declared value as penalty. As against this, the Commissioner (Appeals) has reduced the said amount of redemption fine to 1.8% of the declared assessable value and penalty equal to 0.6% of the value declared value. It has been argued that such low of penalty do not discourage the importers from deliberately violating provisions of Customs Act and Foreign Policy. Reliance has been placed on the decisions of Hon’ble High Court of Delhi in the case of JASPREET SINGH JOLLY-2013 (288) ELT 379 (Del.). It has been argued that the quantum of redemption fine the penalty cannot be reduced without giving justification. Reliance was placed on following decisions of Hon’ble Apex Court and Hon’ble High Court as follows:-
“i) Hon ‘ble Supreme Court of India in the case of Commissioner of Customs, Kolkatta Vs. Diascans(India) Ltd 20 15(320) E. L. T 177(S. C.) in respect of penalty.
ii) Hon’ble High court of Punjab and Haryana in the case of Commissioner of Customs, Amritsar Vs. Ragini Steels (P) Ltd., Delhi 2015(325) E. L. T. 326(P & H) in respect of penalty.
iii)Hon ‘ble High court of Madra in the case of HRB Boarding & Lodging Pvt Ltd Vs. Union of India 2015(322) E. L. T. 4 52 (Mad.) in respect of confiscation of goods.”
5. Learned Counsel appearing for the respondent has relied on the decision of Tribunal in their own case M/s Siemens Gamesha Renewable Power Pvt. Ltd Vs. Commissioner of Customs, Mundra reported at 2019 (365) ELT 631 (Tri-Ahmd.). It was argued that the goods was not prohibited but only restricted. Learned Counsel further argued that, it has mandatory for the lower authorities to follow the decision of the higher forum as has been held by the Hon’ble Apex Court in the case of KAMLAKSHI FINANCE CORPORATION LTD.- reported in 1991 (55) ELT 433 (S.C.). He further argued that it has been held by the Hon’ble Apex Court in the case of SANT LAL GUPTA V. MODERN CO-OP. G.H. SOCIETY LTD-2010 (262) ELT 6 (S.C.) that it is not desirable or permissible for the coordinate benches to disapprove of the earlier decisions and take view contrary to it.
5.1 Learned appellant also argued that no confiscation could have been done as the goods are not available for confiscation as the same have been cleared. He relied upon the decision of Hon’ble Apex Court in case of WESTON Component Ltd-2000 (1) STR 26=2000 (115) ELT 278 (S.C.)
6. We have considered the rival submission. We find that the instant case involves import of “Prime hot rolled steel plates shot blasted/ coated with Zinc Silicate”. In respect of the said items Notification No. 38/2015-20 dated 05.02.2016 places restriction in nature of the prescribed Minimum Import Price. The notification prohibits imports at price less than USD 643/MT for the impugned item by placing the minimum import price as condition of import. The appellants have imported the goods at USD 398/MT, practically half the price prescribed by DGFT by the aforesaid notification. The goods were, therefore, confiscated and offered for release on payment of redemption fine and penalty to the respondents. Initially the assessable value was also revised by the original adjudicating authority to the Minimum Import Price prescribed by the DGFT. However, in appeal the valuation at the declared import price was accepted by Commissioner (Appeals) and no appeal on that ground has been filed by revenue. The Commissioner (Appeals) had reduced the redemption fine and personal penalty in line with the earlier orders of Tribunal in following members.
