The issue, whether redemption fine on re-export imposable was answered by two Chennai and Kolkata bench of Customs, Excise and Service Tax Appellate Tribunals (CESTAT).
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Redemption Fine On Re-Export – Kolkata Bench’s Ruling
The Kolkata Bench of CESTAT in the case of M/s. Leadstone Energy Ltd. versus Commissioner of Customs(Port), Kolkata has held that redemption fine was not imposable on the goods that were allowed for re-export.
The tribunal noted that before importation of the goods, the Pre-Shipment Inspection Certificate was obtained and same was as per goods declared. There is no fault on the part of the appellant and it was only the supplier who has sent the goods which were not found to be as declared.
The tribunal opined that not only Section 125 but no Section of the Customs Act, 1962 gives any officer the power to compel anyone to import or export or re-export. This Section also does not give the Adjudicating Authority the right to give a conditional redemption saying “you can redeem only if you agree to re-export”. In case of prohibited goods the adjudicating authority has only two options: (a) to allow redemption on payment of fine; or (b) to not allow redemption.
The tribunal held that the condition in the Order that the goods should be re-exported after redemption is liable to be set aside.
Redemption Fine On Re-Export – Chennai Bench’s Ruling
The Chennai Bench of CESTAT, on the other hand, in the case of M/s. Scania Commercial Vehicles India Pvt. Ltd. Versus Commissioner of Customs held that it is open to the adjudicating authority to impose redemption fine as well as penalty even when permission is granted for re-exporting the goods.
The tribunal opined that an order permitting re-export of goods is sequentially a separate process which would come into play only after the importer redeems the confiscated goods. Simply because the decision is bundled along with a quasi-judicial order will not change the sequence of events. This being so, confiscation of goods under Section 111(d) of the CA 1962 is a must before the administrative permission for the export of the said goods is given at the administrative discretion of the Proper officer.
The tribunal noted that a penalty is the result of a breach of statutory duty. The main object behind the imposition of penalty is deterrence. Re-export of the goods does not cure the breach of statutory duty already committed. While a fine is imposed on the redemption of offending goods imported in breach of law, a penalty is levied on a person responsible for the breach of statutory duty.
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The tribunal held that no interfere should ordinarily be made by an appellate body, in the discretionary order passed by a lower authority, just because another view might be possible, except on grounds of mala fides or extreme arbitrariness.
Case Details – CESTAT (Kolkata Bench)
Case Title: M/s. Leadstone Energy Ltd. versus Commissioner of Customs(Port), Kolkata
Case No.: Customs Appeal No. 75873 of 2014
Date: 02.08.2024
Case Details – CESTAT (Chennai Bench)
Case Title: M/s. Scania Commercial Vehicles India Pvt. Ltd. Versus Customs Commissioner
Case No.: Customs Appeal No.40256 of 2023
Date: 07.06.2024
