2002 (11) TMI 498 - AT - Customs

Summary

Issues:
1. Allegation of non-payment of customs duty on imported drawings and designs.
2. Allegation of misstatement and suppression leading to non-payment of customs duty.
3. Contention regarding the classification of items as "designs and drawings" for customs duty.
4. Imposition of penalty under Section 114A of the Customs Act.

Issue 1:
The appeal arose from an Order-in-Original passed by the Commissioner of Customs, alleging that the appellant failed to pay customs duty on imported drawings and designs. The appellant entered into an agreement with a foreign designer, receiving drawings against remittance, but customs duty was not paid. The Commissioner confirmed the duty demands based on the agreement terms and admissions made by the appellant.

Issue 2:
The Revenue initiated proceedings, alleging misstatement and suppression by the appellant, invoking Section 28(1) of the Customs Act. The assessable value of imported drawings was determined, and the appellant was called to explain why customs duty should not be levied, along with a penalty under Section 114A. The appellant deposited an amount to cooperate but denied any intention to evade payment.

Issue 3:
The appellant contended that the items imported should not be classified as "designs and drawings" for customs duty purposes. The appellant argued that the items were not goods and should not be subject to customs duty. However, the Commissioner held that the items fell under the category of "drawings and designs" and were liable for customs duty.

Issue 4:
Regarding the penalty under Section 114A, it was noted that the imports were made before the promulgation of the said section. Citing relevant judgments, it was held that no penalty should be imposed under Section 114A. The Tribunal set aside the penalty imposed by the Commissioner based on this analysis.

In conclusion, the Tribunal upheld the duty amounts assessed on the imported drawings and designs, rejecting the appellant's pleas. However, the mandatory penalty under Section 114A was set aside due to the timing of the imports. The judgment extensively analyzed the nature of the imported items, the appellant's admissions, relevant legal provisions, and previous judgments to reach its decision.