2017 (7) TMI 316 - AT - Customs

Appellate tribunal rules in favor of exporter in DEPB scheme case

M/s Atul Ltd Versus Commissioner of Customs (Export), Mumbai And (Vice-Versa)

The appellate tribunal dismissed the appeal of Revenue and allowed the appeal of the exporter in a case involving confiscation of goods under the DEPB ... Misdeclaration of goods - synthetic organic dyes - The goods had claimed credit by virtue of the latter description in each of the shipping bills at 11%/12%/9% at different points in time whereas, being ‘synthetic dyes’, these were entitled only to credit of 4%/5% at different periods in time - whether the exporter had misdeclared the goods? - Held that: - The adjudicating authority has unambiguously asserted that ‘synthetic dye’ and ‘dimethoxy Diben-zanthrone’ are two distinct items. If that be so, the two descriptions in each of the shipping bills should have alerted the proper officer as to the ineligibility for higher credit on account of the goods being ‘synthetic dye’. In these circumstances, we cannot come to the conclusion that the goods had been misdeclared and, therefore, confiscation under section 113 of Customs Act, 1962 with consequent imposition of penalty under section 114 of Customs Act, 1962 is not justifiable. Jurisdiction to determine the DEPB rate - Held that: - with the DEPB scheme no longer being in vogue, re-determination is an academic exercise which we need not overly concern ourselves with. Appeal allowed - decided in favor of appellant. Issues:1. Confiscation of goods under the DEPB scheme for misdescription and claiming higher credit.2. Imposition of penalties and recovery of amount under the Customs Act, 1962.3. Jurisdictional issue regarding determination of DEPB rate.4. Confiscation of goods and redemption on payment of fine.5. Recovery of amount under section 28 of Customs Act, 1962.6. Misdeclaration of goods leading to confiscation and penalties.Analysis:1. The judgment involves a case where goods were confiscated under the Duty Entitlement Pass Book (DEPB) scheme due to misdescription and claiming higher credit than entitled. The exporter had claimed credit at different rates than allowed for synthetic dyes, leading to confiscation based on misrepresentation.2. Penalties and recovery of amounts under the Customs Act, 1962 were imposed on the exporter. The adjudicating authority directed the exporter to pay the difference in DEPB credit allowed, along with penalties and interest. The exporter contested the imposition of penalties and recovery under section 28 of the Customs Act.3. A jurisdictional issue arose regarding the determination of DEPB rate under the Customs Act, 1962. The appellant argued lack of jurisdiction to determine DEPB rate in customs proceedings, citing a previous adjudication order and legal precedents to support the contention.4. The issue of confiscation of goods and redemption on payment of fine was raised, with reference to a Supreme Court decision. The judgment clarified the conditions under which goods can be confiscated and redeemed, emphasizing the physical availability of goods for redemption.5. The recovery of amounts under section 28 of the Customs Act, 1962 was challenged by the exporter. The judgment highlighted that DEPB credit does not fall under the purview of duty or refund, questioning the legal basis for the recovery of the difference in credit granted.6. The misdeclaration of goods by the exporter was examined, focusing on the descriptions provided in the shipping bills. The judgment concluded that the goods were not misdeclared, as the descriptions indicated the nature of the goods, and therefore, confiscation and penalties were deemed unjustifiable.In conclusion, the appellate tribunal dismissed the appeal of Revenue and allowed the appeal of the exporter based on the detailed analysis of the issues surrounding the confiscation, penalties, recovery of amounts, jurisdictional matters, and misdeclaration of goods under the DEPB scheme.