C/12996/2019 — KANDLA vs SIEMENS GAMESA RENEWABLE POWER PVT LTD

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT AHMEDABAD

REGIONAL BENCH – COURT NO. 01

CUSTOM Appeal No. 12996 of 2019

[Arising Out Of OIA-KDL-CUSTM-000-APP-36-19-20 Dated-30/08/2019 Passed By Commissioner ( Appeals ) Commissioner of Central Excise, Customs and Service Tax- AHMEDABAD]

C.C.-KANDLA …..Appellant Custom House, Near Balaji Temple, Kandla, Gujarat

VERSUS

SIEMENS GAMESA RENEWABLE POWER PVT LTD …..Respondent 8th Floor, Futura Block 8, Number 334, Rajiv Gandhi Salai Chennai, Tamil Nadu

APPEARANCE: Shri. Satyyapal Singh Vikal, Assistant Commissioner (AR) for the Appellant Shri. Manish Jain, Advocate for the Respondent

CORAM: HON'BLE MEMBER (TECHNICAL), MR. RAJU HON'BLE MEMBER (JUDICIAL), MR. SOMESH ARORA

              FINAL ORDER NO._10655  /  2024_ 

                                                                     DATE OF HEARING:19.03.2024 
                                                                      DATE OF DECISION:19.03.2024  

RAJU This appeal has been filed by Revenue against reduction of redemption fine and penalty imposed on the respondents.
2. Identical issue has been decided by the Tribunal earlier in respondents own case. Earlier in the identical matter in the case of C.C.-Mundra vs. Gamesa Renewable Pvt. Ltd Final Order No. A/12310/2023 dated 18.10.2023 was passed. In the said order following was observed.

2 | P a g e C / 1 2 9 9 6 / 2 0 1 9 - D B

“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. OIO No & No. date Value of the goods Redem ption fine- OIO Penalty- OIO Rede mptio n fine- OIA Penal ty- OIA MCH/AD C/GPM/ 52/2017 -18 dated 08.09.2 017 16,67,6 2,872/-

3,00,00, 000/- (300 Lakhs) 1,00,00,0 00/- (100 Lakhs) 30,00, 000/- (Thirty Lakhs) 10,00, 000/- (Ten Lakhs)

6.1 Aggrieved by the reduction of redemption fine and penalty order by the Commissioner (Appeals) in the impugned order, the revenue is in appeal before the Tribunal. No appeal has been filed by the respondents nor any cross- objection have been filed.
7. Respondents have relied on in earlier decision of Tribunal in their own case, involving identical dispute in which the following relief was
granted by Tribunal:-

Appeal No. Value of Goods As per impugned order in earlier appeals

Reduced by CESTAT order

3 | P a g e C / 1 2 9 9 6 / 2 0 1 9 - D B

R.F. Penalty R.F. Penalty C/11799/2017 28,86,87,612,68 2,50,00,000/- 70,00,000/- 25,00,000/- 7,00,000/- C/11800/2017 56,44,64,784,58 3,75,00,000/- 45,00,000/- 37,00,000/- 5,00,000/- C/11801/2017 10,89,46,360 1,70,00,000/- 50,00,000/- 17,00,000/- 3,00,000/-

7.1 It is seen that in the earlier order of Tribunal, the penalty imposed was reduced by 90%. In the instance case, the Commissioner (Appeals) has accepted the declared value of the goods setting aside the proposition of the Order-In-Original to levy of Customs Duty at assessable value equal to the Minimum Import Price. The Commissioner (Appeals) has in this regard followed the earlier decision of Tribunal regarding valuation of such goods imported in violation of Minimum Import Price requirement. No appeal has been filed by Revenue and therefore, as far as the valuation of goods is concern the declared value of the goods stands accepted. 8. In case of INDO-CHINA STEAM NAVIGATION CO. LTD.-1983 (13) ELT 1392 (S.C). Following has been observed. “33. In this connection, we may mention one consideration which has weighed in our mind. It is true that modern criminology does not encourage the imposition of severe or savage sentences against criminals, because the deterrent or punitive aspect of punishment is no longer treated as a valid consideration in the administration of Criminal law. But it must be remembered that ordinary offences with which the normal criminal law of the country deals are committed by persons either under the pressure of provoked and unbalanced emotions, or as a result of adverse environments and circumstances, and so, while dealing with these criminals who, in many cases, deserve a sympathetic treatment and in a few cases, are more sinned against than sinners, criminal law treats punishment more as a reformative or corrective than as a deterrent or punitive measure. But it may not be appropriate to adopt the same approach in dealing with every offence committed by a vessel which contravenes Section 52A. Illegal importation of gold has assumed the proportions of a major problem faced by the country, and the manifold, clever and ingenious devices adopted in carrying out these illegal operations tend to show that the organization which is responsible for them is inspired merely by cupidity because it conducts its operations solely for the purpose of making profit, and so, it would be open to the Customs Authorities to take the view that the best way to check the spread of these illegal operations is to impose deterrent fines whenever these offences are discovered and proved. Having regard to this aspect of the matter, if the Customs Authorities took the view that the fine of Rs. 25 lakhs was called for in the present case, we see no reason whatever to entertain the plea made by Mr. Choudhary that the said fine should be reduced. The argument that the impact of such heavy fines may adversely affect the trade of the country, seems to us to be wholly misconceived and ill-founded.”

In the case of BHAGWAN ELECTOR PHOTOCOPIERS Vs. COMMISSIONER OF CENTRAL EXCISE -2017 (346) ELT 565 (P & H) Hon’ble High Court has observed as follows:-

4 | P a g e C / 1 2 9 9 6 / 2 0 1 9 - D B

“14. It is no doubt true that a repeat violator has to be imposed appropriate fine and penalty in order that the same acts as a deterrent to the repeated violation of law, however, at the same time, the Tribunal could not lose site of the fact that in similar cases it had reduced redemption fine to 10% and penalty to 5%. Without going into the issue whether the restriction imposed vide notification dated 5-6- 2012 was applicable or not in view of the period involved being prior to 5-6-2012, we hold that the ends of justice would be met if the quantum of redemption fine and penalty is reduced from the excessive rate at which it has been imposed to 20% each of redemption fine as well as penalty imposed vide the order-in-original. Our view finds support from the decision of this Court in Customs Appeal No. 14 of 2011 (M/s. BE Office Automation Products Limited, Baddi v. Commissioner of Central Excise, Gurgaon), decided on 18-11-2013 [2014 (300) E.L.T. 1486 (P & H) as well of the Madras High Court in the case of Commissioner of Customs Tuticorn v. M/s. Sai Copiers and others [2008-TIOL-98-HC- MAD-CUS = 2008 (226) E.L.T. 486 (P&H)]. Accordingly, order dated 28-6-2013 passed by the Tribunal is modified to the extent as indicated above.”

9.1 In this case too while the earlier order in case of a different assessee was taken note of but redemption fine was enhanced for repeat offence. In this case the offence has been repeated five times earlier and the instant case being the sixth violation.
10. On the above, it is apparent that the key factor for determination the quantum of redemption fine is that it should discourage the importer from repeating the offence. The general consensus of the higher Court is that the redemption fine should be sufficient to discourage people from violating the law repeatedly. It is seen that appellant has already violated exim policy in following cases.

Sr. No. Appeal No. Bill of Entry No/Date Minimum Import Price
Notified for the goods per MT (US $) (A) Declared Value US $/MT (B) Degree of violation US $/MT (A)-(B) 1. C/11800/2017 6549473/- 30.08.2016 643 494 149 2. C/11800/2017 6548674/- 30.08.2016 643 494 149 3. C/11800/2017 6549967/- 30.08.2016 643 462 181 4. C/11799/2017 6028168/- 17.07.2016 643 460 183 5. C/11801/2017 7441850 14.11.2016 643 398 245

10.1 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

5 | P a g e C / 1 2 9 9 6 / 2 0 1 9 - D B

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. 11. We find that one of the contentions of the respondent is that the earlier orders of the Tribunal has granted similar benefit and are binding on revenue. We find that the earlier orders of the tribunal have failed to take notice of the fact that the appellant is a repeat offender and is violating law with impunity. The severity of the offence is also increasing. It has failed to notice that the quantum of redemption fine and penalty imposed is not deterring the appellant from repeating the offence. Therefore there is a difference in facts and circumstances. In these circumstances, we find merit in the appeal made by the revenue. The impugned order is set aside and the matter is remanded to the original adjudicating authority to go into the facts of the case and come up with proper quantification of fine and penalty which is adequate to deter the appellant from repeating the offence.
12. The appeal of revenue is allowed by way of remand to the original adjudicating authority in above terms”.

We noticed that the grounds raised in instant case are also identical. Relying on the aforesaid decision in appellant’s own case, the impugned order is set aside and matter remanded to the original adjudicating authority to decide afresh in the terms mentioned in the order dated 18.10.2023.
4. Appeal is allowed by way of remand. (Dictated and Pronounced in the open)

(RAJU)
MEMBER (TECHNICAL)

 (SOMESH ARORA) 

MEMBER (JUDICIAL)

Prachi