JUDGMENT

A.K. Sikri, J.

Civil Appeal Nos. 1633-1638 of 2004

1. In August, 1991, Respondent Nos. 1 and herein imported 2 and 3 containers respectively of alcohol under the description "Undenatured Ethyl Alcohol' (Malt Spirit plus or minus 59.3% Vol.) from an intermediary, M/s. Ravco International Ltd., England (hereinafter referred to as 'RIL' for short). As per the Department, these imports were under invoiced at pound 1.40 per litre whereas the actual price of the said goods was pound 3.78 per litre. This led to issuance of a show cause notice dated 28.09.1992 upon the importers/Respondents herein. It was alleged that the correct transaction value of the imported goods was pound 3.78 per bulk litre and that the goods were imported against invalid licenses. Accordingly, demand of customs duty was raised against Respondent Nos. 1 and 2. It also proposed confiscation of the goods and penal action against the Respondents. The Collector of Customs vide Order-in-Original dated 28.02.1995 upheld the misdeclaration and undervaluation and further held Respondent No. 1 to pay customs duty of Rs. 1,63,74,648/- along with penalty of Rs. 1,64,00,000 and goods to be confiscated. Respondent No. 2 goods valued at Rs. 83,04,501/- to be confiscated. However, the same were provisionally released on furnishing Bank Guarantee of Rs. 1 crore, differential duty to the tune of Rs. 77,34,994/-. A further penalty of Rs. 2.63 crores was imposed. Respondent No. 3 was directed to pay Rs. 20 lakhs as penalty, Respondent No. 4 was imposed the penalty ofRs. 1 crore and Respondent No. 5 was to pay Rs. 1 lakh as penalty.

2. Aggrieved, the Respondents filed appeals before the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as 'CESTAT') and the CESTAT vide its final order dated 10.09.2003, partly allowed the appeals thereby setting aside the order of the Collector regarding enhancement of the unit price, while upholding that import of the said goods was unauthorised and was liable for confiscation. However, the CESTAT reduced the amount of fine imposed and set aside the penalties imposed on the Respondents. Hence the present Appeals.

3. Insofar as the Revenue/Department is concerned, it is aggrieved by the following findings arrived at by the CESTAT in the impugned judgment:

1. Accepting the version of the Respondents-Assessees that the goods in question were imported at UK pound 1.40 per bulk litre and not UK pound 3.78 per bulk litre as claimed by the Revenue.

2. The reduction of redemption fine from Rs. 51,62,413/- to Rs. 10 lakhs.

3. The reduction of penalty on Mr. S.R. Nagpal from Rs. 22,65,006 to Rs.10 lakhs.

4. We may mention at this stage that against the other findings of the Tribunal which have gone against the Assessee, the Assessee has also filed the appeal which is pending before the Bombay High Court.

5. Insofar as the first issue of import price of the liquor in question is concerned, the order of the Collector reveals that the Respondents-Assessees have relied upon a letter indicating that the goods were imported at the rate of UK pound 1.40 per bulk litre. After discussing elaborately, the Collector rejected the authenticity or evidentiary value of the said letter. However, apart from this letter, the Respondents had also produced invoices and in these invoices price of UK pound 1.40 per bulk litre is specifically mentioned. The Collector has not taken into account or considered the import of these invoices. On the other hand, the CESTAT has remarked and rightly so, that when the invoices are produced showing the purchase price of the goods in question and authenticity of these invoices is not doubted by the Department, these will form as the primary evidence in support of the contention of the Respondents that the imported goods were purchased at UK pound 1.40 per bulk litre. We thus, do not find any flaw in the reasoning of the CESTAT while deciding this issue.

6. Insofar as the reduction of redemption fine as well as the pen