2022 (12) TMI 1339 - AT - Customs

Importers Not Liable for Redemption Fines Without Fraudulent Intent

M/s Oberoi Constructions Ltd. And M/s Oberoi Realty Pvt. Ltd. Versus Commissioner of Customs (Import), Nhava Sheva

The Tribunal held that redemption fines and penalties cannot be imposed on importers for misclassification of goods when there is no intent to evade duty. ... Classification of imported goods - Aluminium Profile - to be classified under CTH 76042990 or CTH 76109030? - Confiscation - redemption fine - penalty - HELD THAT:- The facts are not under dispute that the description of the goods namely Aluminium Profiles indicated in the import documents was the same as declared by the appellants in Bills of entry filed before the authorities at the port of import. Insofar as change in classification of the product in question is concerned, the appellants bonafidely believed that the product should appropriately be classified under 76042990 and accordingly, filed the Bills of entry classifying the product under the said CTH. It is not the case of Revenue that the appellants had mis-declared the goods with an intent to evade payment of duty. Since, Section 111(m) ibid provides for confiscation of the goods in the eventuality of misdeclaration of the goods, which are absent in the present case, the redemption fine and penalty cannot be imposed on the appellants. Confiscation of goods, imposition of redemption fine and penalty - HELD THAT:- The Hon’ble Supreme Court in the case of NORTHERN PLASTIC LTD. VERSUS COLLECTOR OF CUSTOMS & CENTRAL EXCISE [1998 (7) TMI 91 - SUPREME COURT] have held that when the description of goods have been correctly furnished in the Bills of entry, the said statutory provisions do not apply for penalizing the importer-appellants. Appeal allowed. Issues:Classification of imported goods under different Customs Tariff Headings, imposition of redemption fine and penalties, mis-declaration of goods, applicability of Sections 111(m), 125, and 112(a) of the Customs Act, 1962.Analysis:The case involved the import of 'Aluminium Profile' initially classified under CTH 76042990, later re-assessed by the department under CTH 76109030, leading to the imposition of redemption fine and penalties. The appellants accepted the re-assessment but challenged the fines and penalties. The Learned Commissioner (Appeals) upheld the demands, prompting the appellants to appeal to the Tribunal.The appellant argued that there was no mis-declaration of goods, hence Sections 111(m), 125, and 112(a) of the Customs Act, 1962 should not apply. They relied on the judgment of the Hon'ble Supreme Court in the case of Northern Plastic Ltd. Vs Collector of Customs and Central Excise (1998) to support their stance.On the contrary, the Revenue's representative contended that the wrong classification of goods by the appellants justified the imposition of fines and penalties as per the impugned order.After hearing both sides and examining the records, the Tribunal noted that the goods' description in the import documents matched what was declared in the Bills of Entry. The appellants believed in good faith that the product should be classified under CTH 76042990. Since there was no misdeclaration with intent to evade duty, the Tribunal held that redemption fine and penalties cannot be imposed, citing the Hon'ble Supreme Court's decision in the Northern Plastic Limited case.Consequently, the Tribunal found no merit in the impugned orders regarding the fines and penalties. They set aside the orders, allowing the appeals in favor of the appellants.In conclusion, the Tribunal's decision focused on the correct classification of goods, absence of misdeclaration, and the inapplicability of redemption fines and penalties in the absence of fraudulent intent, as established by legal precedents.