2005 (12) TMI 512 - AT - Customs

Confiscation and penalty - Demand and Interest - Misdeclaration of value - Import - Notification No. 86/94-Cus

Summary

Issues:
1. Duty demand and penalty imposed on the appellants.
2. Confiscation of goods and penalty under Sections 111 and 112 of the Customs Act, 1962.
3. Application of Section 28AB for interest.
4. Misdeclaration of value and retrospective duty demand.
5. Benefit of Notification No. 86/94-Cus dated 1-3-94.

Analysis:
1. The appellants, a foreign company providing services in India, imported goods through mis-declared values to stay within courier limits. A show cause notice demanded duty of Rs. 69,37,035 for a specific period. The impugned order confirmed a duty demand of Rs. 69,37,035 and imposed a penalty of Rs. 3,00,000 under Sections 112(a) and (b) of the Customs Act, 1962. The duty amount deposited was adjusted against the demand.

2. The Tribunal found that there was no proposal for confiscation of goods under Section 111 of the Customs Act, 1962. Therefore, penalties under Sections 112(a) or (b) could not be upheld. The composite penalty under both sections was not valid as the show cause notice only proposed a penalty under Section 112(b).

3. The Tribunal ruled that interest under Section 28AB could not be upheld for the period in question as this section was introduced after the relevant time frame. The retrospective application of duty demand beyond five years due to misdeclaration of value was also not upheld.

4. The appellants sought the benefit of Notification No. 86/94-Cus dated 1-3-94, which was not granted. The Tribunal noted that the benefit of this notification should be considered, especially for imports made through a courier company after a specific date. Duty demands needed to be recalculated within five years of the demand, applying the relevant notifications.

5. In conclusion, the Tribunal allowed the appeal, setting aside the penalty and remitting the case for re-determination of duty amount within five years from the show cause notice date. The exemption under Notification 86/94-Cus dated 1-3-94 was to be applied as per the findings, directing the original authority to reevaluate the duty amount accordingly.