Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
INSTRUCTION
New Delhi 3rd June, 2013
To,
1. All Chief Commissioners and Directors General under the Central Board of
Excise and Customs.
2. Chief Commissioner (AR), Customs, Excise & Service Tax Appellate Tribunal.
3. All Commissioners of Customs/Central Excise/Service Tax/All Authorised
Representatives, CESTAT/Commissioner, Directorate of Legal Affairs.
4. <[email protected]>
Sub:- Reduction of Government litigation - providing monetary limits
for filing appeals by the Department before CESTAT/High Courts and Supreme court
- Regarding
I am directed to refer to Instruction of even number dated 17.8.2011 on the
captioned subject.
Reference has been received regarding the application of the threshold limit
prescribed vide Instruction ibid to cases where either redemption fine alone is
in dispute or both redemption fine and penalty are in dispute. For example, in
one case the Tribunal confirmed the duty but set aside the penalty of Rs. 5
lakhs and redemption fine of Rs. 15 lakhs imposed by the adjudicating authority.
As the Instruction ibid did not specifically mention about redemption fine a
clarification has been sought whether the word “penalty” mentioned in para 2 of
the Instruction ibid would include redemption fine or otherwise.
The matter has been examined. Redemption fine is an option in the hand of the
owner of goods to redeem goods confiscated by the department for violation of
any provisions of the Customs Act. On the other hand, penalty is imposed on any
person who violates the provisions of the Customs Act while importing or
exporting the goods out of India. Therefore, the nature and scope of penalty is
different from that of the redemption fine. While penalty is in persona,
redemption fine is on goods. However, both redemption fine and penalty are
imposed for violations of the statutory provisions. Therefore, even though
redemption fine cannot be said to be covered under the word ‘penalty’ the
treatment given to both redemption fine and penalty is required to be identical
and hence, redemption fine and penalty would need to be clubbed to decide the
applicability of threshold limit prescribed.
-2-
Accordingly, it is clarified that if the imposition of redemption fine alone
is the subject matter of dispute, and if such redemption fine exceeds the
monetary limits prescribed, then the matter could be litigated further in Courts
and Tribunal. Further, if both the amount of redemption fine and penalty are in
dispute and if such redemption fine and penalty is in dispute, taken together,
exceed the prescribed monetary limit then the matter should be litigated
further.
Instruction ibid stands suitably modified.
This issues with the approval of Chairperson (CBEC).
(Sunil K. Sinha)
Director (JC)
F.No.390/Misc./163/2010-JC