2000 (9) TMI 839 - AT - Customs

Appellate Tribunal Overturns Confiscation & Penalty, Allows Customs Action

The Appellate Tribunal set aside the confiscation of the declared goods and the personal penalty imposed on M/s. Indian Shaving Products Ltd. The Tribunal ... Confiscation under the Customs Act - Seizure under Section 110 of the Customs Act - Mis-declaration - Green channel clearance - Burden of proof of intent to evade duty - Personal penalty under the Customs ActConfiscation under the Customs Act - Burden of proof of intent to evade duty - Green channel clearance - Whether the declared goods imported by the assessee could be confiscated on the finding recorded by the Commissioner. - HELD THAT: - The Tribunal held that the Commissioner's principal basis for confiscating the declared goods was an inference that, had green channel clearance been granted, the excess goods would have escaped detection and duty would have been evaded. The Tribunal found that such an inference, without further evidence of deliberate mis-declaration or intention to evade duty, is insufficient to sustain confiscation. The physical panchnama showed two separately packed cartons, one containing goods for the appellant and the other containing goods for Gillette Egypt, and the appellant informed the Department of the supplier's packing error before examination. The importers could not be held responsible for the supplier's mistake, and the Commissioner ought to have pursued further enquiry (for example, issuing notice to the supplier) if unconvinced by the explanation. On these facts, there was no justification for confiscating the declared goods. [Paras 5, 9]Portion of the order confiscating the declared goods valued at Rs. 5,50,089.24 is set aside.Seizure under Section 110 of the Customs Act - Confiscation under the Customs Act - Whether the excess goods found in the consignment and the packages could be treated and disposed of by the Department. - HELD THAT: - The Tribunal noted that the record establishes that goods in excess of the bill of entry were found. The Tribunal did not decide the merits of confiscation of those excess goods on the present record but observed that since the excess goods were neither claimed by the appellant nor relevant to its asserted imports, the Department is at liberty to deal with the excess goods in accordance with law. The Tribunal therefore did not uphold the Commissioner's confiscation of the declared goods on the same basis but left the question of dealing with the excess goods to the Department's lawful discretion. [Paras 4, 5, 9]The Department is at liberty to deal with the excess goods valued at Rs. 7,77,985/- as it deems fit in accordance with law.Personal penalty under the Customs Act - Burden of proof of intent to evade duty - Whether a personal penalty should be imposed on the importer for the omissions and commissions alleged. - HELD THAT: - The Tribunal found that the factual basis for treating the importer's conduct as deliberate or culpable was inadequate. In the absence of evidence establishing intentional mis-declaration or an attempt to evade duty, and having accepted that the supplier committed a packing error which was notified to the Department before examination, the imposition of a personal penalty was not justified. The Tribunal accordingly set aside the personal penalty imposed by the Commissioner. [Paras 5, 9]Personal penalty of Rs. 1,00,000/- imposed on the importer is set aside.Final Conclusion: The appeal is allowed in part: the confiscation of the declared goods and the personal penalty are set aside; the Department remains free to deal with the excess goods found in the consignment in accordance with law. Issues:1. Confiscation of goods declared in the Bill of Entry and excess goods.2. Imposition of penalty under the Customs Act.3. Justification for confiscation and penalty.4. Arguments by the appellant and respondent.5. Examination of evidence and findings.6. Decision and order of the Appellate Tribunal.Confiscation of Goods:The case involved the importation of goods by M/s. Indian Shaving Products Ltd., where excess goods were found in the package compared to what was declared in the Bill of Entry. The Customs Department seized the excess goods under the belief of possible confiscation under relevant sections of the Customs Act. The adjudicating authority ordered the confiscation of the excess goods and the packages, citing the party's request for green channel clearance as an attempt to avoid examination and detection of excess goods.Imposition of Penalty:The adjudicating authority imposed a fine and a personal penalty on M/s. Indian Shaving Products Ltd. under various sections of the Customs Act for the contravention of import regulations. The penalty was based on the belief that there was an intention to evade payment of Customs Duty.Justification for Confiscation and Penalty:The Customs Department justified the confiscation of excess goods and packages, emphasizing that the excess goods were found to be in excess of the declared goods and that green channel clearance would have facilitated duty evasion. The Department argued that the goods were useful in the importer's plant, indicating they were intended for the importer and not declared to evade duty.Arguments by Appellant and Respondent:The appellant contended that the excess goods were inadvertently packed by the supplier and were not useful to them, thus no intention to evade duty existed. The appellant also argued against the imposition of penalties, stating they were unwarranted. The respondent supported the adjudicating authority's decision, highlighting the findings and justifications provided in the order.Examination of Evidence and Findings:The Appellate Tribunal examined the evidence and found that the confiscation of the declared goods was not justified. The Tribunal noted discrepancies in the examination report and the handling of the goods, indicating that the importer was not responsible for the supplier's error. The Tribunal concluded that there was no evidence of intent to evade duty and set aside the confiscation of the declared goods and the personal penalty.Decision of the Appellate Tribunal:The Appellate Tribunal set aside the confiscation of the declared goods and the personal penalty imposed on M/s. Indian Shaving Products Ltd. The Tribunal allowed the Customs Department to deal with the excess goods as deemed fit in accordance with the law. The appeal was disposed of based on these findings and decisions.