2002 (4) TMI 668 - AT - Customs

Tribunal overturns penalties for misdeclaration, citing compliance efforts & lack of intent

GANGADHARAM APPLIANCES LTD. Versus COMMISSIONER OF CUS., CHENNAI

The Tribunal set aside the order of confiscation, redemption fine, and penalty imposed on the appellant for misdeclaration of goods in the export shipping ... Penalty and fine - Mens rea Issues:Challenge to order of confiscation, imposition of redemption fine, and penalty based on misdeclaration of goods in export shipping bill and DEEC license.Analysis:The appellant contested the order of confiscation, redemption fine of Rs. 50,000, and penalty of Rs. 10,000 due to misdeclaration of goods in the export shipping bill and DEEC license. The shipping bill declared stainless steel circles of AISI 304 grade with thicknesses of 0.8 mm and 0.5 mm, while the DEEC license indicated 8.0 mm and 5.0 mm. The appellant sought an amendment from DGFT to correct the thickness details, which was granted. However, the Commissioner found a misdeclaration initially and imposed fines and penalties. The Tribunal set aside the order, noting that the DGFT amendment justified the export. On re-adjudication, the Commissioner upheld the misdeclaration but acknowledged the DGFT's correction. The appellant argued that the mistake was DGFT's, not theirs, citing relevant case laws emphasizing lack of mens rea and bona fide belief in compliance. The Commissioner's order granting export permission was considered, leading to the Tribunal's decision to set aside fines and penalties.The main contention revolved around the misdeclaration of goods in the shipping bill and subsequent correction through a DGFT amendment. The appellant argued that the mistake was on DGFT's part, not theirs, and highlighted their compliance efforts. Case laws emphasizing lack of intent to offend the law and bona fide belief in compliance were cited to support the argument. The Tribunal considered the circumstances, including the DGFT's correction, the appellant's corrective actions, and the previous export permission granted. Relying on relevant judgments, the Tribunal concluded that fines and penalties were unwarranted in this case, leading to the appeal being allowed and the impugned order set aside.The appellant's representatives contended that the misdeclaration was due to DGFT's error, not intentional wrongdoing on their part. They emphasized the corrective actions taken and cited case laws supporting their argument. The Tribunal acknowledged the initial misdeclaration but noted the DGFT's correction and the appellant's compliance efforts. Considering the lack of intent to violate the law and the bona fide belief in compliance, the Tribunal found no basis for imposing fines and penalties. The previous permission granted for export further supported the decision to set aside the fines and penalties, ultimately allowing the appeal.