2003 (3) TMI 567 - AT - Customs

Tribunal Overturns Customs Penalty, Cites Timely Correction & Disclosure

RM ELECTRONICS Versus COMMISSIONER OF CUSTOMS, JAIPUR

RM ELECTRONICS Versus COMMISSIONER OF CUSTOMS, JAIPUR - 2003 (160) E.L.T. 896 (Tri. - Del.) Issues:Validity of penalty imposed under Section 112(a) of the Customs Act for misdeclaration of goods.Analysis:The appeal challenged the penalty imposed of Rs. 4,21,065 under Section 112(a) of the Customs Act due to misdeclaration of imported goods as Chinese origin when they were actually of Japanese origin. The appellants voluntarily corrected the declaration within 20 days of clearance by depositing the differential duty. The show cause notice proposing the penalty was issued after 3 years of clearance, raising concerns about the legality of penalty imposition.The Tribunal noted that the appellants rectified the declaration error promptly and voluntarily, disclosing the true origin of the goods within 20 days of clearance. The Customs authorities were informed immediately, and the differential duty was deposited accordingly. However, the show cause notice was issued after the statutory period specified in Section 27 of the Customs Act had expired. Consequently, the Tribunal held that no penalty could be legally imposed under Section 112(a) due to the delay in issuing the notice.Moreover, considering the circumstances, the Tribunal found no justification for imposing a penalty under Section 112 of the Customs Act. The appellants' prompt corrective actions and voluntary disclosure indicated no intention to evade customs duty. The absence of mens rea to evade payment and the lack of confiscation order under Section 111(m) for the goods further supported the decision to set aside the penalty. The Tribunal concluded that the impugned order was not legally sustainable.In light of the above analysis, the Tribunal set aside the Commissioner's order and allowed the appeal of the appellants, providing for any consequential relief permissible under the law.