2017 (4) TMI 582 - AT - Customs

Tribunal modifies order, upholds export goods confiscation, imposes fines on individuals.

M/s. Bhagwati International, Shri Mohal Lal Thapar, Partner, Shri Gagan Thapar, Shri Kanchan Kumar Kaura, Partner Versus Commissioner of Customs, New Delhi

The Tribunal modified the original order by setting aside the confiscation of goods seized from the bonded store room and various shops, as well as the ... 100% EOU - import of prohibited item - Ball Bearings - confiscation on the belief that they were imported into India though the import of fully finished Ball Bearings was not permitted under the 100% Export Oriented Unit license. Goods entered for export - Held that: - instead of fully finished ball bearings, the consignment consisted of old, rusted and junked ball bearings and bushes valued at only ₹ 2.65 Lakhs. This is conclusively established the mis-declaration on the part of the appellant. They have admitted to export old and junked ball bearings in the guise of fully finished ball bearings. Consequently, there is no reason to interfere with the impugned order in respect of confiscation of the export goods - confiscation upheld - goods allowed to be redeemed on payment of redemption fine of ₹ 5,00,000/- Goods seized from Bonded Warehouse, shops and godowns - goods imported through 8 consignments under N/N. 13/81-Cus - Held that: - The charges made against the appellant are very serious and have not been substantiated by tangible and solid evidences to establish that the imported consignments were fully finished ball bearings as well as were diverted in the local market. The demand solely resting on the retracted statements, cannot be upheld. At best, such statements may raise a suspicion in our minds that the appellant might have indulged in such fraudulent activities - The demand for customs duty needs to be established at least on the basis of preponderance of probability. The said evidence should at least result in the reasonable conclusion in the minds of a prudent man that such allegations are true. Decided partly in favor of appellant. Issues Involved:1. Confiscation of export goods.2. Confiscation of goods seized from the bonded store room.3. Demand of customs duty.4. Penalties imposed on individuals.Issue-wise Detailed Analysis:1. Confiscation of Export Goods:The export consignment declared as fully finished ball bearings valued at Rs. 24,06,899/- was found to contain old, rusted, and damaged ball bearings valued at Rs. 2,65,942/-. The Customs authorities concluded that this mis-declaration warranted confiscation under Section 113(d) and 113(i) of the Customs Act, 1962. The Tribunal upheld this confiscation, finding no reason to interfere with the impugned order regarding the export goods.2. Confiscation of Goods Seized from the Bonded Store Room:Goods valued at Rs. 2,01,94,912/- were seized from the bonded store room on the allegation that they were illegally imported fully finished ball bearings. Additionally, goods valued at Rs. 27,53,400/- seized from various shops and godowns were also ordered for confiscation. The Tribunal found that the only evidence for these allegations were the inculpatory statements of the partners, which had been retracted before the Magistrate. Without corroborating documentary evidence, the Tribunal concluded that the confiscation of goods from the bonded store room and other locations was not justified and set aside the confiscation.3. Demand of Customs Duty:The impugned order demanded customs duty amounting to Rs. 3,84,43,296/- for the eight consignments imported under Notification No. 13/81-Cus. This demand was based on the allegation that the imported goods were fully finished ball bearings and were diverted into the local market. The Tribunal found that the evidence relied upon was insufficient, mainly resting on retracted statements. The Tribunal emphasized that such serious charges require solid and tangible evidence, which was lacking in this case. Consequently, the demand for customs duty was set aside.4. Penalties Imposed on Individuals:The impugned order imposed personal penalties on the partners of the firm and other individuals under Sections 112 and 114 of the Customs Act, 1962. The Tribunal modified these penalties, imposing a penalty of Rs. 1,00,000/- each on Shri Mohan Lal Thapar and Shri Kanchan Kumar Kaura.Conclusion:The Tribunal's order modified the original order as follows:- Set aside the confiscation of goods valued at Rs. 2,01,94,912/- seized from the bonded store room.- Set aside the confiscation of goods valued at Rs. 27,53,400/- seized from various shops and godowns.- Set aside the demand for customs duty amounting to Rs. 3,84,43,296/-.- Upheld the confiscation of goods entered for export under Section 113(d) and 113(i) of the Customs Act, 1962.- Allowed redemption of export goods on payment of a fine of Rs. 5,00,000/-.- Imposed penalties of Rs. 1,00,000/- each on Shri Mohan Lal Thapar and Shri Kanchan Kumar Kaura.The impugned order was thus modified, and the Tribunal pronounced this judgment in open court on 11.04.2017.