2004 (1) TMI 496 - AT - Customs

Tribunal Upheld Confiscation, Reduced Fine for Misdeclaration

VRINDAVAN CARPETS Versus COMMR. OF CUS. (PREV.), MUMBAI

The Tribunal upheld the confiscation but reduced the redemption fine to Rs. 1,00,000 and the personal penalty to Rs. 10,000 due to deliberate ... Confiscation - Drawback - Misdeclaration Issues: Misdeclaration of goods for duty drawback claimDetailed Analysis:1. Issue of Misdeclaration for Duty Drawback Claim:The appellants exported a consignment declared as 100% cotton handloom rugs, claiming drawback under S.S. No. 5702. However, upon examination, the goods were identified as 100% bath rugs falling under S.S. No. 6306. The Commissioner of Customs imposed a redemption fine and a personal penalty under the Customs Act, 1962. The exporters argued that subsequent clarifications classified the goods as floor coverings. The Tribunal noted that the purchase order described the goods as 100% cotton bath rugs, indicating a deliberate misdeclaration to avail an inadmissible benefit. The clarification provided by the Handloom Export Promotion Council did not support the appellants' claim, as it classified the goods under a different heading. Consequently, the Tribunal upheld the confiscation but reduced the fine and penalty due to the circumstances and the amount of drawback claimed.2. Legal Interpretation of Duty Drawback Rates Schedule:The Tribunal analyzed the Duty Drawback Rates Schedule, noting that Chapter 57 covers carpets and textile floor coverings, while Chapter 63 deals with other textile articles. S.S. No. 5702 pertains to cotton durries, rugs, and chenille, attracting a 6% drawback, whereas S.S. No. 6306 specifically includes bath mats and rugs with a 7% drawback. The Tribunal emphasized that the goods were misdeclared intentionally, as evidenced by the purchase order and the subsequent clarification. The classification of the goods as bath rugs under a different heading invalidated the appellants' claim for duty drawback under S.S. No. 5702.3. Reduction of Fine and Penalty:Considering the facts and circumstances of the case, the Tribunal partially allowed the appeal by upholding the confiscation but reducing the redemption fine to Rs. 1,00,000 and the personal penalty to Rs. 10,000. This adjustment was made based on the misdeclaration of goods and the intention to avail an inadmissible benefit through the duty drawback claim. The Tribunal's decision aimed to balance the penalty imposed with the nature of the violation and the amount of drawback claimed by the exporters.In conclusion, the Tribunal's judgment addressed the misdeclaration of goods for duty drawback claim, the legal interpretation of the Duty Drawback Rates Schedule, and the adjustment of the fine and penalty based on the circumstances of the case. The decision underscored the importance of accurate declaration in claiming duty drawbacks and upheld the penalties while making a slight reduction considering the specific details of the case.