2019 (2) TMI 1572 - AT - Customs

Tribunal upholds demand for live consignment, overturns penalties due to procedural flaws

M/s SHUBHLAXMI TEXTILE, M/s SURAJ MAHENDRA KUMAR DESAI Versus C.C. -NEW DELHI (ICD TKD) (IMPORT)

M/s SHUBHLAXMI TEXTILE, M/s SURAJ MAHENDRA KUMAR DESAI Versus C.C. -NEW DELHI (ICD TKD) (IMPORT) - [2019] 10 G S.T.R. - OL 632 (CESTAT–Del) Issues Involved:1. Seizure and adjudication of the live consignment imported vide Bill of Entry No. 2293952 dated 31.05.2013.2. Re-assessment and demand for past imports made under 18 Bills of Entry for the period 2011-13.Issue-wise Detailed Analysis:1. Seizure and Adjudication of the Live Consignment:- The appeal arises from an Order-in-Original confirming the demand raised via a Show Cause Notice. The consignment of fabrics imported by the appellant was examined and re-examined by Customs and DRI officers. Samples drawn were tested at CRCL, revealing discrepancies in the declared and actual composition of the fabrics.- Statements from the appellant's partner admitted to the discrepancies, but he claimed the mis-declaration was not intentional. The goods were declared based on documents from the exporter, and the appellant was unaware of the exact composition.- The appellant argued that the examination and sealing of the container were improper, and no samples were provided to them, depriving them of the right to re-examine the goods.- The adjudicating authority observed that the issue was not of mis-declaration of value but of the description and classification of goods, leading to a demand for differential duty. The appellant contested the imposition of penalty and confiscation, citing reliance on documents from the exporter and past clearance of similar consignments by Customs.- The Tribunal found that the sealing of the container without a punchnama was improper and held that there was no deliberate mis-declaration by the appellant. The declaration was based on documents from the overseas supplier, and the appellant acted in good faith.- The Tribunal set aside the confiscation and penalty, relying on precedents where declarations based on supplier documents were not considered deliberate mis-declaration.2. Re-assessment and Demand for Past Imports:- The department re-assessed past imports based on a report from the First Secretary (COIN) obtained from Chinese Customs, alleging undervaluation of goods.- The appellant argued that the report was inconclusive, filled with contradictions, and not authenticated by Chinese authorities. The report was not provided to the appellant, and the cross-examination of relevant officers was denied.- The Tribunal found that the report lacked evidentiary value and could not be relied upon for adjudication. The department failed to prove any extra remittance by the appellant to the supplier beyond the declared value.- The Tribunal held that the demand for past imports was not sustainable as the assessments were final under Section 17 of the Customs Act and could not be re-opened without review. The invocation of Section 28 for extended period demand was not justified as mis-declaration was not proved.- The Tribunal set aside the demand for past imports and penalties imposed on the appellant and its directors, citing lack of deliberate mis-declaration and procedural lapses by the department.Conclusion:- The Tribunal upheld the demand for the live consignment but without any penalty, acknowledging no deliberate mis-declaration by the appellant.- The demand for past imports was set aside due to lack of conclusive evidence and procedural deficiencies.- Penalties on the appellant and its directors were also set aside, emphasizing adherence to principles of natural justice and proper evidentiary standards.