2006 (11) TMI 476 - AT - Customs

Summary

Issues:
The issues involved in this case are the rejection of drawback claim, confiscation of goods under Customs Act, and imposition of penalties under Section 114(iii) of the Customs Act.

Rejection of Drawback Claim:
The appellants filed Shipping Bills claiming drawback for export of Taffeta Silk Fabrics. Samples were drawn at the exporter's premises and at Cochin port. The test report from Cochin indicated the goods were not Taffeta silk as declared. The Adjudicating Authority held the goods liable for confiscation under Customs Act sections 113(i) and 113(ii) and rejected the drawback claim. However, the Commissioner found the goods to be made of polyester filament yarn and eligible for drawback at admissible rates. Penalties were imposed under Section 114(iii) of the Customs Act. The appellants contested these findings, arguing that the goods were indeed Taffeta silk fabrics.

Confiscation of Goods under Customs Act:
The Commissioner held the impugned goods were liable for confiscation under Customs Act sections 113(i) and 113(ii) due to misdeclaration. The appellants challenged this decision, presenting evidence that the goods were Taffeta silk fabrics. They highlighted the supervision of departmental officers during stuffing, the confirmation from the Joint Commissioner regarding samples drawn, and certificates from the buyer and Corporation Bank confirming the nature of the exported goods. The appellants argued that the department's actions were aimed at covering up delays in settling drawback claims.

Imposition of Penalties under Section 114(iii) of the Customs Act:
Penalties were imposed on M/s. Sadguru Exports and individuals under Section 114(iii) of the Customs Act. The appellants contested these penalties, emphasizing the evidence supporting the export of Taffeta silk fabrics and the lack of proper investigation by the department. They pointed out discrepancies in the test reports and the presence of Ladies Middies made of polyester fabric alongside Taffeta silk fabrics in the consignment. The appellants asserted that the benefit of doubt should go to them, leading to the appeal's allowance with consequential relief.