2020 (4) TMI 803 - AT - Customs

Tribunal overturns redemption fine and penalty for misdeclaration in export documents

M/s. SSAPP Overseas Pvt. Ltd. Versus Commissioner of Customs (Export), New Delhi

M/s. SSAPP Overseas Pvt. Ltd. Versus Commissioner of Customs (Export), New Delhi - TMI Issues:- Redetermination of assessable value for export goods- Imposition of penalty under section 114 of Customs Act, 1962- Jurisdiction of the Tribunal in cases of sanction of drawbackRedetermination of Assessable Value:The appeal was filed against an order-in-appeal that modified the penalty related to one out of six shipping bills filed for the export of ready-made garments to Dubai. The goods were found to be composed entirely of cotton instead of a polyester-cotton blend as declared. A market inquiry was conducted to determine prices for reassessment. The declared value of Rs. 53,10,379 was re-determined at Rs. 46,41,840. The redemption fine was reduced to Rs. 6,00,000 and the penalty to Rs. 3,00,000. The appellant contested this redetermination, claiming that export proceeds were realized as per the original declaration. The Tribunal noted that the goods were misdeclared but found no evidence of deliberate intent. The difference in drawback claimed and eligible drawback was only 2%. Consequently, the confiscation of goods and imposition of penalty were deemed inappropriate, leading to the setting aside of the redemption fine and penalty.Imposition of Penalty:The authorized representative argued that the issue pertained to the sanction of drawback, which was beyond the Tribunal's jurisdiction. He emphasized the misdeclaration evident in the records and cited a High Court decision affirming penalties for such activities, even if export proceeds were fully realized. However, the Tribunal considered the negligible quantity of misdeclaration and the minimal difference in drawback claimed, leading to the conclusion that the penalty imposed was too harsh. As a result, the redemption fine and penalty were set aside.Jurisdiction of the Tribunal:The Tribunal clarified that the issue revolved around the declaration of value for export purposes. The appellant contended that the amount realized represented the correct transaction value, citing established law that market inquiries in India could not substitute those in the destination country. The Tribunal acknowledged the misdeclaration but found no evidence of deliberate intent, especially considering the small portion of the consignment affected. Ultimately, the Tribunal concluded that the confiscation of goods and the penalty imposed were not warranted in this case, leading to the disposal of the appeal with modifications.