2020 (1) TMI 282 - AT - Customs

Tribunal overturns penalties in resin import case, emphasizing procedural fairness

The Tribunal found in favor of the appellant, M/s Apollo Tyres Ltd, in a case involving the inadvertent omission of goods in the bill of entry for resin ... Amendment in the bill of entry - Advance Authorization Scheme - CHA omitted to declare 3.75 MTs of ‘Kolophonium C’ and subsequently, sought amendment of the bill of entry as provided for in section 149 of Customs Act, 1962 - It is seen that, instead of considering the request for amendment to include the goods covered by the second invoice for the consignment, proceedings were initiated and, that too, in the absence of SCN. HELD THAT:- The application for amendment of bill of entry has not been acted upon and is, as yet, pending before the competent authority. In those circumstances, there is no justification for initiation of proceedings against the importer. From the records, we are unable to ascertain if any further investigation to establish intent to mis-declaration the goods was evidenced. Had the incompleteness of the declaration been complemented by a similar mis-declaration in the bill of lading, there could have been some support to a premise of commission of an offence. We do not find any evidence to that effect. In the circumstance of a mis-match between the bill of lading and the actual clearance of the goods, proceedings under section 116 of Customs Act, 1962 would have arisen. It is, therefore, obvious, that any intended mis-declaration of quantity would have succeeded only with a corresponding mis-declaration in the bill of lading. Such is not on record herein. It would appear that the mis-declaration of the goods covered by only one of the invoices is inadvertent and not deliberate. It would have been appropriate for the competent authority to dispose off the application for amendment of the bill of entry - there are no reason to sustain the confiscation of goods and imposition of penalty - the impugned order is modified to the extent of setting these aside and relieving the importer of the burden of redemption fine and penalty under Customs Act, 1962. Appeal allowed in part. Issues:1. Duty liability and clearance under the Advance Authorization Scheme.2. Amendment of bill of entry and initiation of proceedings without show cause notice.3. Confiscation and penalty imposition under Customs Act, 1962.4. Mis-declaration of goods and intent to mislead authorities.5. Application for amendment of bill of entry and its implications.6. Discrepancy between bill of lading and actual clearance of goods.Analysis:1. Duty liability and clearance under the Advance Authorization Scheme:The case involved M/s Apollo Tyres Ltd importing resin under the Advance Authorization Scheme. The appellant sought clearance without duty payment under a specific license. However, due to an inadvertent omission of goods in the bill of entry, the entire consignment was denied duty exemption under the scheme.2. Amendment of bill of entry and initiation of proceedings without show cause notice:The appellant requested an amendment to include omitted goods, but proceedings were initiated without considering the request or issuing a show cause notice. This raised concerns about the procedural fairness and the right to be heard.3. Confiscation and penalty imposition under Customs Act, 1962:The goods were held liable for confiscation and a penalty under sections 111(i), 111(m), and 112 of the Customs Act, 1962. The Commissioner of Customs (Appeals) upheld the order, leading to the appeal before the Tribunal.4. Mis-declaration of goods and intent to mislead authorities:The presence of two different goods was known at the time of import, raising questions about the intent behind the omission in the bill of entry. The Tribunal assessed whether there was evidence of deliberate mis-declaration or an attempt to mislead authorities.5. Application for amendment of bill of entry and its implications:The application for amending the bill of entry was pending before the competent authority. The Tribunal emphasized the importance of acting on such requests promptly and fairly, especially when there was proper and timely reporting by the importer.6. Discrepancy between bill of lading and actual clearance of goods:The Tribunal noted a discrepancy between the bill of lading and the actual clearance of goods. However, without evidence of intent to mis-declare or corresponding mis-declaration in the bill of lading, the Tribunal concluded that the mis-declaration was inadvertent and not deliberate. Consequently, the confiscation of goods and imposition of penalties were set aside.