2012 (10) TMI 553 - AT - Customs

Tribunal Upholds Decision on Customs Misdeclaration Case, Emphasizes Genuine Mistake vs. Evasion

The Tribunal upheld the Commissioner's decision in a case involving misdeclaration in a Bill of Entry, where excess goods were confiscated and penalties ... Misdeclaration in the Bill of Entry – confiscation – redemption fine - appellants noticed that the supplier had given two invoices - But the Appellant while authorising the CHA to file Bill of Entry had given only one invoice to the Customs House Agent which resulted in wrong declaration in the quantity of the goods and the value of the goods – Held that:- an error in filing Bill of Entry which error was detected before taking delivery of goods and Customs Act provides for correction of such errors as may be seen from Section 149 of the Customs Act - It to be a case of genuine mistake and ordered that there was no case for confiscation of the goods and therefore redemption fine imposed set aside - appeal filed by Revenue is rejected Issues: Misdeclaration in Bill of Entry leading to confiscation of goods, legality of penalty imposed under Section 112.Analysis:1. Misdeclaration in Bill of Entry leading to confiscation of goods:The case involved a research institute importing goods through a Bill of Entry that declared one spectrophotometer but actually contained two spectrometers. The Customs House Agent (CHA) filed the Bill of Entry based on one invoice provided by the institute, resulting in incorrect declaration of goods quantity and value. The adjudicating officer confiscated the excess goods valued at Rs. 5,03,475/- and imposed a redemption fine of Rs. One lakh along with a penalty of Rs. 50,000/- under Section 112(b)(v) of the Customs Act, 1962. However, the Commissioner (Appeals) found it to be a genuine mistake and set aside the redemption fine, reducing the penalty to Rs. 10,000/-.2. Legality of penalty imposed under Section 112:The Revenue appealed the Commissioner's decision, arguing that the misdeclaration in the Bill of Entry warranted confiscation of goods irrespective of intent to evade customs duty. Citing legal precedents, the Revenue contended that mens rea was not necessary for confiscation under Section 111 of the Customs Act. The Tribunal noted that the Supreme Court decisions highlighted in the argument did not preclude correcting bona fide errors in the Bill of Entry. The Tribunal emphasized that the issue in the present case was an error in filing the Bill of Entry, which was rectifiable under Section 149 of the Customs Act. The Tribunal upheld the Commissioner's decision, stating that the situation arose from a bona fide error and there was no need to interfere with the order. It also observed that imposing a penalty under Section 112 when confiscation was not ordered under Section 111 was not legally justified. However, since the importer did not challenge the penalty, the Tribunal chose not to intervene in that aspect of the order.In conclusion, the Tribunal rejected the Revenue's appeal, affirming the Commissioner's decision based on the genuine mistake made in the Bill of Entry filing process and the legal provisions allowing for correction of such errors. The Tribunal emphasized the importance of differentiating between bona fide errors and deliberate attempts to evade customs duties, ultimately upholding the Commissioner's ruling on the case.