Tribunal upholds penalty for intentional mis-declaration in export scheme

The Tribunal upheld the penalty imposed on the appellant for intentional mis-declaration and wrongful availment of Cenvat credit during exports under the drawback scheme. The appellant's actions were deemed deliberate, not merely an error, as they knowingly claimed credit while making false declarations. The penalty of Rs. 3 lakhs under Section 114 of the Customs Act, 1962, was affirmed, considering the substantial benefit obtained through mis-declaration. The appeal was rejected, and the appellant was required to pay back the drawback claimed along with interest.

---

---

Issues:
1. Availment of Cenvat credit and mis-declaration in export documents.
2. Imposition of penalty under Section 114 of the Customs Act, 1962.

Analysis:

Issue 1: Availment of Cenvat credit and mis-declaration in export documents
The appellant, engaged in the production of Glass Refills Silver Coated for Vacuum Flask, availed Cenvat credit on inputs received from a supplier. However, during the export period, they declared in their export documents that no Cenvat credit was availed. The Revenue detected this mis-declaration, leading to the appellant paying back the drawback claimed, along with interest. The Commissioner imposed a penalty of Rs. 3 lakhs under Section 114 due to intentional mis-declaration by the appellant.

Issue 2: Imposition of penalty under Section 114 of the Customs Act, 1962
The appellant argued that the mis-declaration was not intentional and did not warrant the penalty. The Revenue contended that as regular exporters, the appellant was aware that Cenvat credit cannot be claimed when exporting under drawback scheme. Despite this knowledge, the appellant availed the credit and made false declarations. The Tribunal upheld the penalty, stating that the appellant's actions were not a mere human error but a deliberate attempt to benefit from both schemes. The Tribunal found no grounds to reduce or eliminate the penalty amount, given the substantial drawback availed through mis-declaration.

In conclusion, the Tribunal rejected the appeal, affirming the penalty imposed on the appellant for mis-declaration and wrongful availment of Cenvat credit during exports under the drawback scheme.

---