Tribunal Partially Allows Appeal for Mis-Declared Goods: Reduction in Fines and Penalties

The Tribunal partially allowed the appeal in the case involving mis-declaration of goods by M/s. Kalpa Times, leading to denial of duty exemption, confiscation of goods, and imposition of penalties. The Tribunal reduced the redemption fine from Rs. 1.5 Lakhs to Rs. 50,000 and decreased the penalties on M/s. Kalpa Times and M/s. K. Shyam International from Rs. 1.5 Lakhs to Rs. 15,000 each. This decision was based on the appellants being actual users importing paper for student magazines, and the excessive nature of the redemption fine and penalties imposed by the Department.

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Issues: Mis-declaration of goods leading to denial of duty exemption, confiscation of goods, imposition of penalty, reduction of redemption fine and penalties.

In this case, M/s. Kalpa Times imported coated paper declared as less than 70 GSM but was found to be 90-250 GSM, leading to denial of concessional duty rate under Notification No. 21/2002. The Joint Commissioner not only denied the concessional rate but also ordered confiscation of goods under Section 111(m) of the Customs Act, 1962, with an option for redemption on payment of a fine of Rs. 1.5 Lakhs and imposed penalties on M/s. Kalpa Times and M/s. K.Shyam International. The Commissioner (Appeals) upheld this decision. The appeal was filed against this order.

During the hearing, the appellants argued that the import was solely for their magazine and not for sale, and they had declared the paper as LWC paper below 70 GSM in the bill of entry to claim the duty exemption. They accepted the higher GSM of the paper during examination to avoid demurrage, without a personal hearing or show cause notice. The appellants contended that the redemption fine and penalties were excessive for a bona fide import meant for student magazines.

The Department argued that the acceptance of higher GSM by the importers amounted to misdeclaration, justifying the denial of duty exemption, confiscation of goods, and penalties. However, the Tribunal noted that the importers were actual users, not traders, importing paper for student magazines. As the Department did not provide any profit margin calculation for the imported goods, the Tribunal found the redemption fine and penalties excessive. Consequently, the redemption fine was reduced to Rs. 50,000, and the penalties on M/s. Kalpa Times and M/s. K. Shyam International were reduced to Rs. 15,000 each. The impugned order was modified accordingly, partially allowing the appeals.

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