2008 (5) TMI 178 - AT - Customs

Tribunal rules exporter not fraudulent in misdeclaration case, highlights importance of accurate goods classification

The Tribunal ruled in favor of the appellant, M/s. Sri Balaji Traders, in a case involving the misdeclaration of export goods for DEPB credit eligibility. ... When the exporter had declared the description as plain paper and not as plain paper in cut sizes, it cannot be alleged that there was fraudulent misdeclaration of the description of the goods by the exporter - As the export was under DEPB scheme no consignment would have been cleared for export without detailed examination - Commissioner found the charge of misdeclaration against the appellants without basis - impugned order of confiscation and penalty is set aside arid this appeal is allowed Issues: Misdeclaration of export goods for DEPB credit eligibilityAnalysis:The appeal involved a case where M/s. Sri Balaji Traders (SBT) exported paper under the DEPB scheme, declaring it as 'plain paper' eligible for a 9% DEPB credit. However, upon examination, it was revealed that the goods were wove paper/writing paper, classified under a different category eligible for only a 3% DEPB credit. The Commissioner of Customs imposed a fine and penalty on SBT for misdeclaration to obtain undue DEPB credit. SBT challenged this decision in the appeal.The appellant argued that they had not misdeclared the goods, as they had declared them as plain paper according to trade practice, even though the invoice described the goods as wove paper in reels. They contended that since the goods were not declared as 'plain paper in cut sizes,' the charge of misdeclaration was unfounded. Additionally, they cited Circular No. 15/97-Cus. to assert that Customs officers were not authorized to decide the admissible DEPB rate, which should be determined based on the DGFT's public notice.Upon review, the Tribunal found that the goods were not declared to match the category eligible for a 9% DEPB credit, as the shipping bill did not specify the relevant entry. The description in the ARE-1s and invoice also indicated wove paper in reels, not plain paper in cut sizes. Considering the circumstances, the Tribunal concluded that there was no fraudulent misdeclaration by the exporter. Furthermore, given that the export was under the DEPB scheme, detailed examination would have been conducted, and it was unlikely for plain paper to be assessed under the higher DEPB credit category. Consequently, the Tribunal set aside the impugned order, ruling in favor of the appellant and allowing the appeal.Overall, the judgment clarified the requirements for DEPB credit eligibility, emphasizing the importance of accurate declaration and classification of goods for export under such schemes.