2014 (5) TMI 89 - AT - Customs

Importer fined for misdeclaration of goods; Tribunal upholds penalty under Customs Act.

M/s. AK. Enterprises Versus Commissioner of Customs(Port), Kolkata

The Appellate Tribunal CESTAT KOLKATA upheld the Commissioner(Appeals) order confirming the fine and penalty imposed on the importer for misdeclaration of ... Imposition of Penalty & Fine - Confiscation of ‘lace without visible background’ – Mis-declaration - Wrongly consigned goods to Indian importer - Held that:- Neither side has disputed about the merit of the case, that is, the correctness of the classification and applicable rate of duty relating to the 5332.800kgs imported goods which were declared in the Bill of entry as ‘embellishment for garments’ but later found on examination as ‘lace without visible background’ - Though Revenue has accepted contention of the overseas supplier in the letter dt.15.03.2010 for arriving at the correct classification, however made a sincere attempt to argue that the said letter dt.12.03.2010 issued by the overseas supplied is an after-thought and procured to cover up the mis-declaration but could not produce any evidence to show the positive involvement of the importer in the importation of the 5332.800 kgs. of ‘lace without visible back ground’ instead of ‘embellishment for garments(undyed)’ as declared in the Bill of Entry – While reducing penalty and fine, Commissioner(A) has recorded reasons in the impugned order. No merit is found in the contention of the Revenue that the reduction of fine and penalty is incorrect, in absence of cogent evidences rebutting the contention of the letter dated 15.03.2010 issued by the over-seas supplier stating clearly that the goods were wrongly consigned to the importer in India - Simultaneously, it also cannot be denied by the importer-assessee that there occurred a mis-declaration and mis-classification of the good imported into India, which they have readily accepted on the basis of letter dt.12.03.2010, waived the issuance of Show Cause Notice and participated in the adjudication proceeding - Relying upon Chemical Suppliers Versus COLLECTOR OF CUSTOMS [1992 (9) TMI 111 - SUPREME COURT OF INDIA] - There is violation of Sec. 111(m) of the Customs Act,1962, hence the goods are liable for confiscation and consequently, imposition of penalty is also warranted u/s 112 - This Court do not agree with the contention of counsel for importer that confiscation and penalty cannot be visited as the violation is held to be technical in nature. Penalty and fine imposed by Commissioner(A) is reasonable - Also, there is no force in the contention of assessee that the goods are not liable for confiscation and consequently no penalty is imposable - In the result the Order of Commissioner(A) is upheld to the extent of confirmation of fine and penalty and Appeals filed by Revenue as well as assessee are rejected – At this stage the Ld. Advocate for assessee submits that the bank guarantee submitted with the department is pending - Since Appeals of Revenue as well as assessee are disposed of, consequential relief, if any, as per law, flows from Order, be allowed – Decided against assesse. Issues:Appeal against Order-in-Appeal No. KOL/CUS/CKP/171/2010 dated 14.06.2010 passed by the Commissioner(Appeals) Customs, Kolkata.Detailed Analysis:Issue 1: Background and Procedural DelaysThe case involved an appeal by both the Revenue and the importer-assessee against the same Order-in-Appeal. The Appeals were expedited due to a High Court order, leading to multiple adjournments due to various reasons such as engagement of advocates and elections. The matter was finally heard on 24.04.2014.Issue 2: Facts and ConfiscationThe importer declared goods as 'embellishment for garments' but Customs examination revealed 'lace without visible background' attracting higher duty. The importer admitted to the misdeclaration, leading to confiscation of goods and imposition of a fine and penalty. The Commissioner(Appeals) reduced the redemption fine and penalty, leading to appeals by both parties.Issue 3: Arguments by RevenueThe Revenue argued that the importer admitted to misdeclaration, supported by a letter from the overseas supplier indicating a wrong dispatch of goods. They contended that the reduction in fine and penalty by the Commissioner(Appeals) was erroneous and cited legal precedents to support their position.Issue 4: Arguments by ImporterThe importer argued that they were unaware of the misdeclaration, as evidenced by the overseas supplier's letter taking responsibility for the wrong consignment. They claimed the reduction in penalty and fine was unjustified, emphasizing their lack of malafide intention and the technical nature of the violation.Issue 5: Judgment and Legal AnalysisThe Tribunal found that the goods were liable for confiscation under Sec. 111(m) of the Customs Act, 1962, and imposition of penalty under Sec. 112. Citing a Supreme Court judgment, the Tribunal upheld the confiscation and penalty, rejecting arguments against the reduction in fine and penalty by the Commissioner(Appeals).Issue 6: Conclusion and DispositionThe Tribunal upheld the Commissioner(Appeals) order confirming the fine and penalty, rejecting appeals by both the Revenue and the importer. Other issues not pressed were not considered. The Tribunal also addressed the pending bank guarantee submission.This detailed analysis covers the background, arguments, legal analysis, and conclusion of the judgment issued by the Appellate Tribunal CESTAT KOLKATA.