Commissioner Of Customs vs Marmo Classic
2003 Latest Caselaw 739 Bom

JUDGMENT

J.P. Devadhar, J.

1. In all these Customs Applications filed under Section 130A of the Customs Act, 1962, the Commissioner of Customs seeks an order directing the CEGAT, Mumbai to raise and refer certain questions of law for opinion of this Court which according to him arise out of the order of the Tribunal. Since the issues raised in all these Customs Applications are similar, they are disposed of by this common Judgment.

2. For the sake of convenience, we have taken the facts in Customs Application No. 27 of 2002.

In this case, the respondent had imported various consignments of raw/rough marble blocks and sought clearance under the Customs Tariff Heading 2515.12. The Commissioner of Customs found that the goods imported were in violation of the import policy and by the Order-in-Original dated 31-8-2001 and 13-9-2001, the Commissioner confiscated the goods imported by the Respondent under Section 111(d) of the Customs Act, 1962. However, the Commissioner of Customs gave an option to the Respondents to redeem the goods on payment of fine and penalty as more particularly set out in the order passed by the Commissioner of Customs, Mumbai.

3. Being aggrieved by the aforesaid orders, the Respondents filed appeals before the CEGAT, Mumbai and by a common order dated 16-4-2002, the CEGAT, Mumbai reduced the fine approximately to 20% of CIF value determined and reduced the penalty to 5% of the CIF value determined by relying upon its decision in the case of Stonemann Marble Industries v. Commissioner of Customs. Being aggrieved by the aforesaid order, the Commissioner of Customs has filed the present applications under Section 130A of the Customs Act, 1962 stating therein that the following questions of law arise out of the order of the Tribunal, namely :

"1. Whether on the facts and in the circumstances of the case the Tribunal was right in law reducing the redemption fine imposed Under Section 125 of the Customs Act, 1962 from Rs. 1.01 crores to Rs. 25,00,000/- and penally imposed Under Section 112(a) from Rs. 29,40,000/- to Rs. 7,50,000/- in Appeal No. C/1030/01-Mum. and in reducing the redemption fine from Rs. 42,84,000/- to Rs. 7,00,000/- and penalty from Rs. 4,00,000/- to Rs. 2,00,000/- in Appeal No. C/1042/2001-Mum. by following its earlier orders in the case of Stonemann Marble Industries.

2. Whether on the facts and in the circumstances of the case the Tribunal was right in law in intervening with the redemption fines of Rs. 1.01 crores and Rs. 42,84,000/- imposed under Section 125 by the Commissioner of Customs, Jawahar Custom House, Nhava Sheva and reducing it to Rs. 25,00,000/- and Rs. 7,00,000/- and with the penalties of Rs. 29,40,000/- & Rs. 4,00,000/- imposed under Section 112(a) by the Commissioner of Customs, Jawahar Customs House, Nhava Sheva and reducing them to Rs. 7,50,000/- and Rs. 2,00,000/- respectively without examining the facts of the case ?"

4. Mr. Desai, learned Senior Counsel appearing on behalf of the Applicant submitted that the Tribunal neither in the present case nor in its earlier decision which has been relied upon in the present case given any reasons for reducing the redemption fine and penalty. He submitted that the Tribunal blindly followed its decision in the case of the Stonemann Marble Industries's and even the said decision does not lay down any principles or ratio as to how and under what circumstances and to what extent the redemption fine and penalty imposed by the adjudicating authority can be reduced. He submitted that the summary dismissal of the Special Leave Petition filed by the Revenue against similar decision of the Tribunal in the case of Jai Bhagwati Impex Pvt. Ltd. v. CC & CE, Goa [2002 (145) E.L.T. 158 (Tribunal) = 2002 (48) RLT 199 (CEGAT-Mum.)] does not mean that the decision of the Tribunal has been accepted by the Apex Court on merits. According to the Counsel, the Tribunal committed a fundamental error in reducing the redemption fine and penalty without assigning any reasons and, therefore, the questions of law set out hereinabove do arise out of the order of the Tribunal.

5. Mr. Kantawala, learned Counsel appearing on behalf of the Respondents on the other hand submitted, that the redemption fine and penalty has been reduced by the Tribunal by following its earlier decisions in the case of Jai Bhagwati Impex Pvt. Ltd., Mahalaxmi Tile & Marble Co. Pvt. Ltd. [2001 (137) E.L.T. 191 (Tri.-Mum.)], and M/s. Stonemann Marble Industries. He submitted that final order passed by the Tribunal in the case of Jai Bhagwati Impex Pvt. Ltd., wherein the redemption fine and penalty was reduced has been upheld by the Apex Court by dismissing the Special Leave Petition filed by the Revenue. He submitted that in fact, the Revenue has accepted the decision of the Tribunal in all the cases and has granted refund of the amount as per the order passed by the Tribunal and the respondent has alone been singled out for the reasons best known to the revenue. He submitted that after having implemented the order of the Tribunal, the Revenue has filed the Reference applications in all those cases as an afterthought and only with a view to delay the refund amount due to the Respondents on account of reduction in redemption fine and penalty. He submitted that as the Customs authorities failed to implement the order of the Tribunal, the respondents were compelled to file a Writ Petition bearing Nos. 4124 of 2002 in this Court. He submitted that the issues raised in the present application are squarely covered by the various decisions of the Tribunal and the Apex Court and, therefore, the Reference Applications filed by the Revenue are liable to be dismissed and the Respondents must be granted refund of the redemption fine and penalty due to them as per the order of the Tribunal as has been done in the case of other importers.

6. Having heard the Counsel on both sides, we are of the opinion that there are no questions of law which can be said to arise out of the order of the Tribunal. It is not disputed by the Revenue that the facts in the case of the Respondents i.e. Marmo Classic and the facts in the case of Stonemann Marble Industries and Jai Bhagwati Impex Pvt. Ltd., are similar. On perusal of the orders passed by the Tribunal in the case of Stonemann Marble Industries and Jai Bhagwati Impex Pvt. Ltd., it is seen that the Tribunal has reduced the redemption fine and penalty by taking into account the margin of profits and the demurrage incurred by the importers of the said consignments. It is pertinent to note that the Tribunal in similar circumstances have taken a uniform view to restrict the redemption fine to 20% of the CIF value and penalty to 5% of the CIF value. Under these circumstances, it is evident that the decision of the Tribunal is essentially based on finding of fact. The Tribunal has reduced the redemption fine and penalty by taking into account its earlier decision as well as the margin profit and the amount of demurrage incurred on the goods. It is not disputed by the Revenue that the CEGAT has power to reduce the redemption fine and penalty. Therefore, in the facts of the case whether the reduction in redemption fine and penalty is justified or not, is essentially a finding of fact and no material has been adduced by the Revenue to establish that the order of the Tribunal is ex-facie perverse, arbitrary and contrary to the facts on record.

7. In this view of the matter, we see no merits in the Customs Applications filed by the Revenue. Accordingly, all the Customs applications filed by the Revenue are dismissed. However, in the facts of the case, there will be no order as to costs.