2008 (6) TMI 157 - AT - Customs

Tribunal directs reexamination of DEPB goods classification, upholds redemption fine for misdeclaration

The Tribunal remanded the case for reexamination of the classification of goods under the DEPB scheme, directing consideration of a different code. ... Appellant exporting the goods by mis-declaring the same as fabric made of Spun yarn to get benefit of S. No. 46-A of DEPB scheme – impugned order that further claim made by appellant at S. No. 47-A should be decided by the DGFT authorities, is justified - goods were allowed to be exported on provisional basis subject to the test report. As per the test report, the goods were not as per the declaration made in the shipping bill; therefore, goods are liable for confiscation & redemption fine Issues:1. Classification of exported goods under DEPB scheme.2. Jurisdiction of Customs authorities vs. DGFT in deciding DEPB claims.3. Imposition of redemption fine on misdeclaration of goods.Analysis:1. The Tribunal remanded the case to the adjudicating authority for fresh decision regarding the classification of goods under the DEPB scheme. The appellant initially declared the goods as printed fabric made out of spun yarn, but subsequent testing revealed otherwise. The Tribunal held that the goods could still qualify under a different classification code, and the matter needed reexamination. The adjudicating authority was directed to consider if the goods fell under a different code and whether the DEPB benefit could be denied by Customs or only by DGFT.2. The Commissioner of Customs held that the goods were not made of spun yarn and thus not eligible for DEPB under a specific code. The appellant argued that the Commissioner did not consider their claim under a different code as directed in the remand order. The appellant contended that Customs authorities lacked jurisdiction to decide DEPB claims, which should be determined by DGFT. The Tribunal upheld the authority of DGFT to decide the appellant's claim under the relevant code.3. The Revenue appealed for a redemption fine due to misdeclaration of goods to gain higher DEPB benefits. The Tribunal found the goods liable for confiscation under the Customs Act. The appellant accepted the test report showing the fabric was not made of spun yarn and withdrew their claim under one code. The Tribunal upheld the imposition of a redemption fine based on misdeclaration, citing a Supreme Court decision. The appellant argued against the fine as the goods were not seized, but the Tribunal deemed the fine applicable due to misdeclaration, setting it at one lakh rupees.This detailed analysis of the judgment highlights the issues of classification under the DEPB scheme, the jurisdiction of authorities in deciding DEPB claims, and the imposition of a redemption fine for misdeclaration of goods.