2006 (7) TMI 81 - AT - Customs

Misdecleration of good Alleged that importer were made misdecleration of goods in order to take benefit of DEEC scheme accordingly fine and penalty confirmed After considering the details authority reduced the quantum of redemption fine and penalty

Summary

Issues:
1. Misdeclaration of goods for DEEC benefit
2. Confiscation of goods under Customs Act
3. Imposition of redemption fine and penalty
4. Reasonableness of fine and penalty imposed

Analysis:

Issue 1: Misdeclaration of goods for DEEC benefit
The appellants imported Stainless Steel Coil AISI 304 from Belgium and filed a Bill of Entry claiming exemption from duty under DEEC Scheme. The goods were initially examined by NML, which certified them as not conforming to AISI 304 grade. However, NML later clarified that the goods did confirm to AISI 304 grade in terms of chemical composition. The appellants then withdrew the original Bill of Entry and filed a new one declaring the goods as "STAINLESS STEEL COIL SECOND QUALITY GRADE AISI 304." The Tribunal held that by claiming DEEC benefit for prime quality goods and later admitting the goods were of seconds quality, the appellants misdeclared the goods with the intent to evade duty, justifying the confiscation of goods under Section 111(m) of the Customs Act.

Issue 2: Confiscation of goods under Customs Act
The Tribunal upheld the decision of the Commissioner to confiscate the goods under Section 111(m) and (o) of the Customs Act, considering the misdeclaration of goods by the appellants for DEEC benefit. The Tribunal found that the subsequent filing of a home consumption Bill of Entry and clearance of goods did not change the fact that the original misdeclaration was made with the intention of duty evasion, justifying the confiscation and penalty imposed under Section 112(a) of the Act.

Issue 3: Imposition of redemption fine and penalty
The appellants contested the redemption fine and penalty imposed, arguing that they consistently declared the unit price of the goods as USD 1060 and eventually paid duty on that basis, showing no intention to evade payment. The Tribunal considered the circumstances and reduced the quanta of fine and penalty imposed by the Commissioner, finding the original amounts to be excessive given the factual aspects of the case. The fine and penalty were reduced to Rs. 1,00,000 and Rs. 5,000, respectively, based on the exceptional circumstances and lack of misdeclaration of grade in the goods.

Issue 4: Reasonableness of fine and penalty imposed
The Tribunal found that the original amounts of fine and penalty imposed by the Commissioner were not reasonable considering the factual aspects of the case, such as the withdrawal of the original Bill of Entry with alleged misdeclaration and subsequent correct declaration of the goods in the second Bill of Entry for warehousing. The Tribunal reduced the fine and penalty to Rs. 1,00,000 and Rs. 5,000, respectively, taking into account the circumstances and factual details of the case, thereby allowing the appeal only to that extent.