2007 (5) TMI 485 - AT - Customs

Summary

Issues: Mis-declaration of goods description, undervaluation, confiscation of goods, imposition of penalty, reduction of redemption fine and penalty

Mis-declaration of goods description:
The appellant, a 100% EOU, filed a Bill of Entry for a consignment described as "mixed zinc scrap." However, upon examination, it was found to contain 70% aluminium scrap and 30% zinc scrap. The assessing officer valued the consignment at a higher amount due to the presence of more expensive aluminium scrap. The Commissioner concluded that this constituted mis-declaration and undervaluation, impacting the appellant's entitlement for duty-free imports and clearance in the Domestic Tariff Area.

Undervaluation:
The Commissioner held that the appellant's declaration of the consignment as "mixed zinc scrap" was incorrect due to the significant quantity and value of aluminium scrap present. The value of the goods was enhanced by the Commissioner, leading to the confiscation of the goods and the imposition of a fine and penalty under Section 112 of the Customs Act.

Confiscation of goods and imposition of penalty:
The Commissioner ordered the confiscation of the goods and offered redemption upon payment of a fine of Rs. 3 lakhs. Additionally, a penalty of Rs. 1 lakh was imposed on the appellant for mis-declaration and undervaluation of the goods. The Commissioner justified the confiscation and penalty based on the mis-declaration of the goods' description and value.

Reduction of redemption fine and penalty:
After considering the facts and circumstances, the appellate authority decided to show leniency by reducing the redemption fine from Rs. 3,00,000 to Rs. 1,50,000 and the penalty from Rs. 1,00,000 to Rs. 50,000. The reduction in the redemption fine and penalty was deemed appropriate given the overall context of the case.

In conclusion, the appellate tribunal partially allowed the appeal, acknowledging the mis-declaration of goods description and undervaluation. While upholding the confiscation of goods and imposition of penalty, the tribunal decided to reduce the redemption fine and penalty amounts as a gesture of leniency towards the appellant.