2002 (12) TMI 516 - AT - Customs

Confiscation - Misdeclaration - Show cause notice - Waiver of - Confiscation, Redemption fine and penalty

Summary

Issues:
Classification of goods under different headings, eligibility for exemption as an Export Oriented Unit (E.O.U.), alleged misdeclaration of goods, imposition of duty, confiscation of goods, redemption fine, personal penalty under Customs Act, 1962.

Classification of Goods:
The appellants filed a Bill of Entry declaring goods as 'Synthetic Fabrics' under classification 5407.10, claiming benefits under Notification No. 53/97 for E.O.U. However, subsequent examination revealed the goods were woven fabrics made of multifilament yarn of Nylon. The Commissioner found discrepancies and concluded the goods were misdeclared for evasion of duty. The appellants argued no mens rea existed for misdeclaration, emphasizing the duty rate difference between headings. The Tribunal observed no intent to evade duty due to lack of mens rea and set aside the duty imposition.

E.O.U. Eligibility and Misdeclaration Allegation:
The Commissioner found the importer lacked necessary infrastructure to utilize imported materials for E.O.U. purposes and clandestinely sold duty-free raw materials. Consequently, the Commissioner suspected a similar intention in the present case, leading to confiscation of goods under Section 111(m) of Customs Act, 1962. The Tribunal disagreed, noting the absence of mens rea in misdeclaration and lack of evidence to support the Commissioner's presumption, ultimately setting aside the confiscation, redemption fine, and penalty.

Confiscation and Redemption Fine:
The Commissioner ordered confiscation of goods, redemption fine of Rs. 5.00 lakhs, and a personal penalty of Rs. 1.00 lakh under Customs Act, 1962. The Tribunal, after considering the arguments, found no mens rea for misdeclaration and disagreed with the Commissioner's presumption based on past clearances. It highlighted the necessity of providing documentary evidence for allegations and set aside the confiscation, redemption fine, and penalty.

Inadequate Evidence and Waiver of Notice:
The appellants contested the raised values, arguing they were not provided with comparative goods invoice copies. The Tribunal emphasized the Revenue's obligation to supply necessary documents for allegations' proof. It criticized the Commissioner's findings based on assumptions and lack of evidence, leading to the rejection of loaded values. The Tribunal highlighted the importance of evidence in contentious issues and set aside the value loading.

Conclusion:
The Tribunal set aside the Commissioner's order, allowing the appeal based on findings of no mens rea for misdeclaration, lack of evidence supporting confiscation, redemption fine, and penalty, and the necessity of providing documentary evidence for allegations. The Tribunal emphasized the importance of evidence in determining duty liability and upheld the appellants' arguments, ultimately setting aside the imposed penalties and fines.