Marble importer's mis-declaration of quantity leads to customs duty demand confirmation with reduced penalties

CESTAT Ahmedabad upheld customs duty demand against marble importer who mis-declared quantity as 2199 sq. mtr. when actual measurement was 4516.031 sq. mtr. The appellant waived show cause notice and personal hearing, accepting liability for duty, fine and penalty. Following Vikas Spinners precedent, CESTAT ruled that acceptance without protest precludes later challenge. Order confirmed goods confiscation and duty demand but reduced redemption fine from Rs. 15 lakhs to Rs. 5 lakhs and penalty from Rs. 2 lakhs to Rs. 50,000. Appeal partly allowed.

---

---

Issues Involved:
1. Confiscation of imported goods u/s 111(m) of the Customs Act, 1962.
2. Imposition of penalty u/s 11(a) of the Customs Act, 1962.
3. Demand of customs duty based on revised quantity.
4. Validity of measurements taken by customs authorities.
5. Absence of show cause notice and personal hearing.

Summary:

Confiscation of Imported Goods u/s 111(m) of the Customs Act, 1962:

The appellant, M/s Mahi Marble, imported marble slabs and declared a total quantity of 2199 Sq. Mtr. However, upon examination under a punchnama, the actual quantity measured was 4516.031 Sq. Mtr. The customs authorities concluded that the declared quantity was incorrect and invoked section 111(m) of the Customs Act, 1962 for confiscation of goods.

Imposition of Penalty u/s 11(a) of the Customs Act, 1962:

Due to the mis-declaration, the customs authorities imposed a penalty under Section 11(a) of the Customs Act, 1962. Additionally, a redemption fine amounting to Rs. 15 lakhs was imposed.

Demand of Customs Duty Based on Revised Quantity:

The demand of duty was made on the revised quantity as per the Punchnama of the Revenue. The appellant argued that the physical verification of imported goods was not conducted by industry experts, and the measurement should have been done by an expert of the industry.

Validity of Measurements Taken by Customs Authorities:

The appellant contended that the measurement of marble slabs requires technical expertise and should have been done by industry experts. The Tribunal noted that the measurement was taken by an Inspector using a measuring tape, and the measurements were recorded in millimeters of length and height. The Tribunal found that the method of measurement was not challenged before the clearance of goods.

Absence of Show Cause Notice and Personal Hearing:

No show cause notice was issued as the appellant had requested for the immediate release of seized goods without a show cause notice and personal hearing. The Tribunal referred to the case of Vikas Spinners, where it was observed that once the assessee accepts the objection raised at the time of assessment without demur, he cannot later challenge the assessment. Similarly, in the case of Aggarwal Traders, it was held that if the appellant expressly consents to the value proposed by the Revenue and foregoes the need for a show cause notice, the consented value becomes the declared transaction value requiring no further investigation or justification.

Conclusion:

The Tribunal upheld the confiscation of goods, demand of duty, and imposition of penalty. However, considering the facts of the case, the redemption fine was reduced from Rs. 15 lakhs to Rs. 5 lakhs, and the penalty was reduced from Rs. 2 lakhs to Rs. 50,000/-. The appeal was partly allowed in these terms.

(Order pronounced in the open court on 02.05.2024)

---