Commissioner Of Customs (Airport), ... vs M/S. Sun Exports

(Arising out of Order-in-Appeal C. Cus. No. 665/2011 dated 21.9.2011 passed by the Commissioner of Customs (Appeals), Chennai)

Commissioner of Customs (Airport), Chennai Appellant

Vs.

M/s. Sun Exports Respondent

Appearance

Ms. Indira Sisupal, AC (AR), for the Appellant Shri V. Shantha Ram, Advocate for the Respondent

CORAM

Honble Shri D.N. Panda, Judicial Member

Date of Hearing / Decision: 30.09.2015

Final Order No. 41360 / 2015

Revenues prayer in this appeal is that when there was violation of the law relating to Standards of Weights & Measures (Packaged Commodities) Rules, 1977 for no declaration of the MRP on the package of the goods while the imported goods were liable to declaration of MRP, reduction of redemption fine from Rs. 4,00,000/- imposed by the adjudicating authority to Rs.50,000/- by the appellate authority has caused prejudice to Revenue. Similarly, penalty of Rs.2,00,000/-. imposed under section 112(a) of Customs Act, 1962 was reduced to Rs.25,000/- by the appellate authority for no reason.

2. The argument advanced by respondent is that Commissioner (Appeals) has rightly calculated the redemption fine and penalty.

3. Heard both sides and perused the record.

4. Prima facie, the argument of the respondent seems to be sound when para 7 of the appellate order is read. The authority has appreciated that redemption fine neutralizes the margin of profit but it is inconceivable how the goods valued at Rs.20,10,531/- is expected to yield a profit of Rs.50,000/- with the stake of principal of Rs.20,10,531/- invested on confiscable goods. The goods were mobile phones imported from China making huge investment. No one would invest Rs. 20 lakhs to make a profit of Rs.50,000/- which is not impossible to be earned even trading in domestic market.

5. Goods were without declaration of MRP on the packages. Therefore, considering minimum profit of 10% of the value of goods the redemption fine shall be Rs.2,00,000/-. Revenue succeeds in its appeal on this count partly.

6. So far as imposition of penalty of Rs.2,00,000/- is concerned, no doubt there was violation of the prevailing law on MRP. Omission of declaration of MRP brought the respondent to the fold of law. Penalty being a preventive as well as curative measure of law, to prohibit and arrest lawlessness behaviour in the customs area, a token penalty of Rs.25,000/- imposed by Commissioner (Appeals) has send message to the society that breach of law is mildly punished and such approach shall be bonus to evasion. That causes prejudice to Revenue. Therefore, it is enhanced to Rs.1,00,000/- under section 112(a) of the Customs Act, 1962 looking to the gravity of the matter. This decision is taken following the decision of the Honble Supreme Court in the case of Commissioner of Customs, Mumbai Vs. Mansi Impex  2011 (270) ELT 631 (SC).

7. Revenue appeal is allowed partly to the extent indicated above.

(Dictated and pronounced in open court)

(D.N. Panda) Judicial Member Rex

3