ORDER
S. Kalyanam, Vice President
1. This appeal is directed against the order of the Collector of Customs, Cochin dated 30th May, 1991, levying a penalty of Rs. 40 lakhs on the appellant under Section 112 of the Customs Act, 1962. Shri Ramachandran, the learned Consultant for the appellant submitted that initially the Collector of Customs by order dated 14-6-1988 levied a fine of Rs. 25 lakhs under Section 125 of the Customs Act 1962, the Act for short, besides a penalty of Rs. 5 lakhs. On this order being appeal to the Tribunal, the Tribunal by order No. 630/88, dated 8-12-1988 remanded the matter after dealing with the main contention of the appellant regarding the quantum of fine as under :
“The learned Advocate has argued that the redemption fine is exorbitant and that at the time of importation of the goods the margin of profit was almost NIL. He has also argued that even at the reduced rate of duty at 105% ad valorem, present margin of profit to the applicants will be nearly Rs. 800 per M.T. only. The learned Advocate has also drawn our attention to the appellants’ letter dated 6-6-1988 (copy in which they furnished details of the cost of import and the extent of margin of profit available to them.) The Collector has not dealt with the said letter. He has neither accepted the details furnished in the said letter nor has he given any reason for not accepting the same. He should have dealt with the appellants’ letter cited above and should have given reasons for not accepting the details furnished therein.’
In the circumstances discussed above, we consider that this matter should be remanded back to the Collector of Customs, Cochin, for ascertaining the reasonable margin of profit involved in the importation of this consignment and thereafter determine the redemption fine giving full justification therefor. Accordingly, we remand the matter to the Collector of Customs, Cochin, for re-decision on the point of redemption fine in the light of our observations above. Since we are remanding the matter, the Collector should also re-decide the quantum of penalty taking into consideration the margin of profit and other facts and circumstances of the case. Thus, the remand of the case covers both the redemption fine and penalty.”
The present impugned order is after remand.
2. Shri Ramachandran, the learned Consultant submitted that the appellants started clearing the goods from bonded warehouse on and from 5-12-1988 and cleared the entire goods on 11-1-1989. The clearances were effected piece-meal on various dates as given under :
(1) 5-12-1988 to 8-12-1988
(2) 8-12-1988 to 10-12-1988
(3) 21-12-1988 to 29-12-1988
(4) 30-12-1988 to 11-1-1989
It was urged that while initially a fine of Rs. 25 lakhs and penalty of Rs. 5 lakhs [was] demanded, consequent on the remand, the appellate authority has enhanced the quantum of penalty to Rs. 40 lakhs on the ground that the goods have been cleared and were not available for confiscation. The learned Consultant submitted that the Department initially as against the order of levying a fine of Rs. 25 lakhs and penalty of Rs. 5 lakhs did not prefer any cross appeal and therefore the appellants questioned the correctness and sustainability in law of the fine of Rs. 25 lakhs and penalty of Rs. 5 lakhs by way of an appeal before the adjudicating authority by filing an appeal and in this view assailed the correctness of the order of the Collector (Appeals). The learned Consultant further submitted that the profit margin has been properly worked out by taking into consideration the relevant materials and the Collector has not also taken note of the payment of additional duty involving Rs. 22,65,638/- at the rate of 245% and further payment of Rs. 13,16,361/- by way of warehousing bond interest. The learned Consultant therefore submitted that for arriving at the profit margin the expenses incurred by the appellant on the above items should be reckoned and further urged that lorry charges were also paid at the rate of Rs. 390 per M.T. The learned Consultant also produced the order copy of the Special Bench of the Tribunal bearing No. C/91 & 92/92-D, dated 4th March, 1992 under which the appellants’ appeal stood rejected in terms of Section 129E of the Customs Act, which has been by mistake put as Section 35F of the Central Excises & Salt Act, 1944. It was therefore urged that the matter will have to be remanded.
3. Shri J.M. Jeyaseelan, the learned DR submitted that the appellant has not paid anything at all till date and therefore cannot make any grievance about the enhancement of the penalty particularly when the goods have been cleared by them. However, the learned DR has no objection to the quantum of the profit margin to be worked out by taking into account the various expenses and duty liability incurred by the appellant as pleaded by proper verification by the concerned authorities and in accordance with law.
4. We have considered the submissions made before us. The short issue before us is about the appellant’s liability to penalty and the quantum thereof based on relevant criteria in accordance with law in the facts and circumstances of the case under the Act. We note that for actually working out the profit margin the duty on the warehousing bond interest paid/payable and likewise other expenses incurred should be taken note of before arriving at the quantum of the profit. We further note that the appellant’s appeal remains dismissed by the Special Bench by Order No. C/91 & 92/92-D, dated 4-3-1992, a copy of which has been produced before us. Therefore, without expressing any opinion on the merits of the issue and leaving all the issues open to be decided in accordance with law by the adjudicating authority, we remand the matter for disposing of the issue in accordance with law and taking note of the observations of the Tribunal in the order referred to earlier. Ordered accordingly. Shri J.M. Jeyaseelan, the learned DR submitted that the adjudicating authority may also be directed to verify as to whether the duty levied on the consignment in question relates to the appellant.
Sd/-
(S. Kalyanam)
Dated : 13-3-1995 Vice President
V.P. Gulati, Member (T)
7. I observe that when the adjudicating authority passed the impugned order, the order of the Tribunal cited by the learned Consultant under which the appellant’s appeal in regard to the additional duty demanded has been dismissed was not available and the appellants also had not brought to the notice of the adjudicating authority about the demands raised against them by the lower authorities for additional duty. Any duty liability fixed on the goods is a relevant factor for consideration for working out the margin of the profit based on the payments actually made and other expenses incurred. In this context it will also be relevant to take into consideration the use of the funds the appellants had after sale of the goods. In view of the above, I agree with my learned Brother that the matter will have to be considered afresh for fixing the margin of profit taking into consideration the above.