2005 (9) TMI 413 - AT - Customs

Summary

Issues:
1. Allegation of suppression of facts to evade duty payment based on weight discrepancies in imported iron and steel scrap.
2. Adjudication of duty and penalty under Sections 28(1) and 114A of the Customs Act 1962.
3. Appeal challenging the findings of the adjudicating authority regarding excess quantity and penalty imposition.

Analysis:

Issue 1: The case involved an appeal against an Order-in-Original passed by the Commissioner of Customs, Trichy, regarding discrepancies in the weight of imported iron and steel scrap declared in the Bill of Entry compared to the actual weight at the time of delivery. The Revenue alleged suppression of facts to evade duty payment due to these discrepancies.

Issue 2: The adjudicating authority allowed a 2% weight discrepancy for excess quantity and demanded duty on the balance. Duty was confirmed on the excess quantity under Section 28(1) of the Customs Act 1962, with an equal penalty imposed under Section 114A. The appellants contested these findings, arguing that the excess was due to factors like differences in weighing scales and not clandestine activities.

Issue 3: The Tribunal carefully reviewed the case records and upheld the demand for duty on the excess quantity beyond the 2% allowance. The Tribunal found that when the importer receives goods exceeding the declared quantity, duty is payable on the excess. However, regarding the penalty under Section 114A, the Tribunal noted the absence of evidence indicating an intention to evade duty. As there was no mala fide conduct on the part of the appellants, the mandatory penalty was set aside, and the appeal was partially allowed in favor of the appellants.

In conclusion, the Tribunal upheld the duty demand on the excess quantity but set aside the penalty due to the lack of evidence showing intent to evade duty. The judgment clarified the importer's liability to pay duty on goods received in excess of the declared quantity while emphasizing the importance of establishing deliberate wrongdoing to impose penalties under the Customs Act 1962.