2009 (10) TMI 780 - AT - Customs

Tribunal Upholds Rs. 6 Lakh Penalty for Country of Origin Misdeclaration

VD. PADHYE Versus COMMR. OF CUS. (IMPORT-SEA PORT), CHENNAI

The Tribunal upheld the penalty of Rs. 6 lakhs imposed on the appellant for involvement in misdeclaration of the country of origin and evasion of ... - Issues:Misdeclaration of country of origin, anti-dumping duty liability, penalty imposition, financial status of the appellantAnalysis:The case involves allegations of misdeclaration of the country of origin to evade anti-dumping duty. The premises of a company and its Managing Director were searched based on specific intelligence, leading to the discovery of incriminating documents related to imports. The main importer admitted the anti-dumping duty liability and paid the duty along with interest before seeking immunity from penalty. The Hon'ble Settlement Commission imposed a penalty of Rs. 6 lakhs on the importer, which was challenged in the present appeal by the Managing Director of another company involved in the importation process.The appellant argued on three main grounds. Firstly, he claimed that the imported goods were of Malaysian origin, not Chinese, and thus not subject to anti-dumping duty. Secondly, he asserted continuity of documents proving Malaysian origin and the existence of a manufacturing facility in Malaysia. Thirdly, he highlighted his own financial constraints as reflected in his income tax return. On the other hand, the Department contended that the appellant's arguments lacked merit since the main importer had already admitted liability and the appellant's own statements indicated complicity in the evasion scheme.Upon review of the case records and arguments from both sides, the Tribunal found that the appellant's claims were not substantiated. The main importer had acknowledged the misdeclaration and paid the duty, rendering the appellant's assertions regarding the origin of the goods unconvincing. The Tribunal noted the Hon'ble Settlement Commission's decision not to grant total immunity from penalty in this case, emphasizing the appellant's significant role in the alleged scheme. Consequently, the Tribunal ruled that the appellant had not established a strong case for a complete waiver of the penalty but directed him to pre-deposit 50% of the penalty amount within a specified timeframe. Compliance with this directive would result in the waiver of the remaining penalty amount, with recovery stayed during the appeal process.In conclusion, the Tribunal's decision upheld the penalty imposed on the appellant due to his involvement in the misdeclaration of the country of origin and evasion of anti-dumping duty. The ruling balanced considerations of liability, financial status, and the evidence presented, ultimately requiring a partial pre-deposit of the penalty amount while staying further recovery pending appeal proceedings.