Customs duty recovery, Section 108 statements, and misclassification limits on confiscation and penalty clarified in import dispute.

Clearance of imported goods under section 47 of the Customs Act does not preclude a subsequent notice under section 28 for recovery of short-levied duty, and the department is not confined to section 129D merely because out-of-charge was granted. An un-retracted statement recorded under section 108 may be relied on without independent corroboration where it is consistent with other evidence. Wrong classification by itself does not amount to misdeclaration, and misclassification alone is insufficient to justify confiscation under section 111 or penalty under section 112.

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Issues: (i) whether, after clearance of imported goods under Section 47 of the Customs Act, 1962, the department could invoke Section 28(1) for recovery of short-levied duty without first resorting to Section 129D; (ii) whether an admitted and un-retracted statement under Section 108 of the Customs Act, 1962 required independent corroboration before being used against the importer; and (iii) whether wrong classification of goods by the importer amounted to misdeclaration so as to justify confiscation and penalty.

Issue (i): whether, after clearance of imported goods under Section 47 of the Customs Act, 1962, the department could invoke Section 28(1) for recovery of short-levied duty without first resorting to Section 129D.

Analysis: Clearance of goods under Section 47 does not bar a subsequent notice for recovery of customs duty not levied or short-levied. The relevant date for Section 28 runs from the order of clearance, and the department is not confined to Section 129D merely because out-of-charge had been granted earlier. The precedent relied upon supports the maintainability of proceedings under Section 28(1) after clearance.

Conclusion: The issue was decided in favour of Revenue.

Issue (ii): whether an admitted and un-retracted statement under Section 108 of the Customs Act, 1962 required independent corroboration before being used against the importer.

Analysis: The importer's statement admitting undervaluation was never retracted and was consistent with the statements of the other noticees and the accepted classification position. In such circumstances, the statement was treated as reliable evidence and corroboration was not required.

Conclusion: The issue was decided in favour of Revenue.

Issue (iii): whether wrong classification of goods by the importer amounted to misdeclaration so as to justify confiscation and penalty.

Analysis: Classification is a function of the assessing authority, and a wrong classification entry by itself does not amount to misdeclaration. Misclassification, without more, is not a ground for confiscation under Section 111 or penalty under Section 112.

Conclusion: The issue was decided in favour of the assessee.

Final Conclusion: The impugned appellate order was set aside and the matter was remitted to the Commissioner (Appeals) for fresh disposal in accordance with law and natural justice, with the legal position on duty demand and evidentiary use of the importer's statement clarified, while misclassification alone was held insufficient for confiscation or penalty.

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