2000 (2) TMI 313 - AT - Customs

Customs appeal dismissed, recovery upheld for erroneous drawback payment due to misdeclaration.

The appeal was dismissed, upholding the Collector of Customs' decision to recover an erroneously paid drawback amount of Rs. 1,07,563/- due to ... Export - Drawback - Penalty - Misdeclaration Issues:1. Recovery of erroneously paid drawback amount.2. Denial of drawback claim for misdeclaration of goods.3. Interpretation of the nature of the exported goods as surgical dressings.4. Justification of penalty imposition for misrepresentation.Issue 1: Recovery of Erroneously Paid Drawback AmountThe appeal was filed against a decision where the Collector of Customs ordered the recovery of a drawback amount of Rs. 1,07,563/- that was mistakenly paid to the appellants due to misdeclaration of goods in the Shipping Bill. Additionally, a further denial of drawback amounting to Rs. 62,055/- was also made. The appellants contested this decision, arguing against the recovery based on the misdeclaration.Issue 2: Denial of Drawback Claim for Misdeclaration of GoodsThe case involved a Shipping Bill filed for the export of goods declared as American Poros Plaster (Surgicals) under a claim for drawback. However, upon examination, it was discovered that the goods were not as declared, with discrepancies noted in the description provided. The appellants argued that the changes made were to align with the claim for drawbacks under a specific heading. The adjudicating authority issued a Show Cause Notice proposing to deny the claim, leading to the subsequent denial and recovery of the drawback amounts.Issue 3: Interpretation of the Nature of Exported Goods as Surgical DressingsThe central question revolved around whether the exported item, termed 'American Poros Plaster,' qualified as surgical dressings and bandages, thus justifying the drawback claim under a specific heading. The appellants contended that the product's classification as a surgical item was supported by references to the British Pharmacopoeia Codex 1963 and expert opinions. However, the Asst. Drug Controller's assessment concluded that the goods did not meet the criteria for surgical dressings, emphasizing their use as adhesive plaster containing Capsicum Oleoresin for conditions like rheumatism, lumbago, and similar ailments.Issue 4: Justification of Penalty Imposition for MisrepresentationRegarding the penalty imposed for misrepresentation, the appellants argued against its levy, citing past practices and lack of mens rea in previous instances. However, the adjudicating authority upheld the penalty, emphasizing the deliberate inclusion of the term 'surgical' to claim a benefit they were not entitled to. The judgment maintained that the penalty was warranted, as evidenced by the intentional misrepresentation to secure the drawback. Ultimately, the case was dismissed, affirming the denial of the appellants' claims and the imposition of the penalty.