2006 (9) TMI 335 - AT - Customs

Summary

Issues: Mis-declaration of goods as vitamin mixes, Confiscation of goods, Validity of import licences, Reduction of redemption fine and penalties

Mis-declaration of goods as vitamin mixes:
The case involved the appellants filing 33 bill of entries for importing vitamin mixes from China, suspected of trying to clear single vitamins as mixes to evade duty. Enquiry revealed correspondence with the supplier describing single vitamins as mixes. Recovered documents showed discrepancies in descriptions. The tribunal found mis-declaration established from recovered invoices and correspondence, rejecting explanations of preparing invoices for foreign exchange purposes.

Confiscation of goods:
The Commissioner confiscated goods for mis-declaration and restricted items, but allowed clearance of restricted items based on another licence. The tribunal upheld confiscation for mis-declaration, noting discrepancies in labels and test results confirming single vitamins. The appellants' possession of valid licences for single vitamins was deemed irrelevant as licences were not available at the time of order placement.

Validity of import licences:
The appellants argued their intention to import vitamin mixes was evident from all import documents, and possession of valid licences for single vitamins negated any intention to mis-declare. However, the tribunal found mis-declaration based on correspondence and recovered documents, reducing redemption fine and penalties but upholding confiscation.

Reduction of redemption fine and penalties:
Considering the totality of facts, the tribunal reduced the redemption fine from Rs. 15 Lakhs to Rs. 10 Lakhs and penalties imposed on the exporting company and its Managing Director. The reduction was based on the infirmity in the order regarding possession of valid licences at the time of order placement and the nature of mis-declaration established through recovered evidence.

In conclusion, the tribunal upheld the confiscation of goods for mis-declaration, reduced the redemption fine and penalties, and emphasized the importance of accurate documentation and compliance with import regulations to avoid penalties and confiscation of goods.