2008 (7) TMI 731 - AT - Customs

Summary

Issues:
Revenue's appeal against impugned Orders-in-Appeal regarding misdeclaration of imported goods leading to confiscation and penalties under Customs Act, 1962.

Analysis:
The case involved a situation where the respondents imported goods declared as Premutilated Synthetic Rags, but they were actually serviceable garments and toys, leading to misdeclaration. The lower authority held the goods liable for confiscation under Section 111 of the Customs Act, 1962, and imposed penalties under Section 112. The respondents appealed to the Commissioner (Appeals), who upheld the confiscation but set aside the penalty based on the argument that once importers relinquished the title, penalty was not imposable. The Revenue challenged this decision citing various grounds.

The Revenue contended that penalty was independent of duty payment and should be imposed even if importers relinquished the title after import and misdeclaration. They argued that the importers' relinquishment after misdeclaration and violation of EXIM policy provisions did not absolve them of penalty liability. Additionally, they pointed out that the Customs House Agent's relinquishment letter could not validly relinquish the title, and misdeclaration of value and description made the goods liable for confiscation and subsequent penalty under Sections 111 and 112 of the Act.

The Revenue further emphasized that the importers' history of similar offenses indicated awareness of misdeclaration, making the relinquishment plea an afterthought to evade penalty. They cautioned against setting a precedent where illegal imports could escape penalties through mere relinquishment letters.

Upon careful consideration, the Tribunal found merit in the Revenue's contentions. They noted clear evidence of misdeclaration by the importer, emphasizing that relinquishing title post-misdeclaration did not absolve them of penalty liability. Consequently, the Tribunal set aside the Commissioner (Appeals)' decision and restored the penalty imposed by the Original Order, allowing the Revenue's appeal.

In conclusion, the Tribunal upheld the imposition of penalties on the importers for misdeclaration and violation of Customs Act provisions, emphasizing that relinquishing title post-misdeclaration did not exempt them from penalty liability. The decision aimed to ensure accountability and prevent the misuse of relinquishment pleas to evade penalties for illegal imports.