2003 (12) TMI 348 - AT - Central Excise

Summary

Issues: Misdeclaration of goods under the Foreign Trade Act, Confiscation of goods, Imposition of fine and penalty

Misdeclaration of Goods under the Foreign Trade Act:
The appeal was against an Order-in-Original that confiscated goods due to misdeclaration under the Foreign Trade Act. The importer declared the goods as RBD Palmolein oil for home consumption but later admitted they were coconut oil. The Customs found a mix-up as the sample did not match the standard. The Commissioner noted the deliberate misdirection and the importer's admission after certification by the Port Health Organisation. The misdeclaration aimed at evading duty and violating ITC provisions. Citing the case of CE, Bombay v. Elephanta Oil and Industries Ltd., it was argued that even if goods were allowed re-export, penalties could still be imposed. The Tribunal upheld the confiscation but reduced the penalty from Rs. 2 lakhs to Rs. 1 lakh, considering the market value difference between palmolein oil and coconut oil.

Confiscation of Goods:
The Commissioner confiscated the goods under provisions of misdeclaration and misdirection. The importer's attempt to rectify the mistake after certification was deemed an afterthought and not accepted. The Commissioner's decision to confiscate the goods was upheld by the Tribunal due to deliberate misrepresentation. The misdeclaration was seen as an attempt to gain a substantial benefit by evading duty and violating regulations. The Tribunal agreed with the confiscation but found the penalty amount excessive, leading to a reduction from Rs. 2 lakhs to Rs. 1 lakh.

Imposition of Fine and Penalty:
The Commissioner allowed redemption of goods on payment of a fine of Rs. 4,00,000 for export purposes and imposed a penalty of Rs. 2,00,000. The Tribunal found the penalty amount excessive and reduced it to Rs. 1,00,000. The decision was based on the market value calculations of palmolein oil and coconut oil, highlighting the substantial financial gain the importer aimed to achieve through misdeclaration. The Tribunal's modification reduced the penalty while upholding the fine for redemption, emphasizing the seriousness of misdeclaration under the Foreign Trade Act.