2008 (6) TMI 535 - AT - Customs

Summary

Issues:
1. Under-valuation and misdeclaration of imported goods.
2. Imposition of redemption fine and penalty.
3. Involvement of Clearing House Agent (CHA) in importation and misdeclaration.
4. Reduction of redemption fine and penalty.
5. Benefit of doubt to CHA regarding penalty imposition.

Analysis:
1. The Appeals were filed by the Appellant-Importer and the Appellant CHA against the Order passed by the Adjudicating Commissioner, alleging under-valuation and misdeclaration of imported shoes and socks by the Appellant-Importer. The Department contended that the goods were imported at undervalued prices and with discrepancies in the declared quantity.

2. The Appellant-Importer's representatives argued that the discrepancies in quantity were unintentional as it was the first-time importation. They also highlighted the financial burden due to enhanced duty, anti-dumping duty, redemption fine, and penalties, leading to the goods being stuck at the docks for 18 months. They requested leniency in imposing redemption fine and penalty due to the prolonged storage causing higher demurrage charges.

3. Concerning the Appellant CHA, it was argued that there was no evidence implicating their involvement in undervaluation or misdeclaration. They claimed to have acted in good faith under the importer's instructions, seeking the penalty imposed on the CHA to be revoked.

4. The J.D.R. supported the impugned Order, justifying the imposition of redemption fine and penalty based on the misdeclaration of value and quantity. However, the Tribunal, after considering both sides' submissions, acknowledged the financial strain on the Appellant-Importer and the unintentional discrepancies in quantity. Therefore, the Tribunal reduced the Redemption Fine to Rs. 1.00 lakh and the Penalty to Rs. 50,000, considering the prolonged storage and the importer's first-time status.

5. Regarding the Appellant CHA, the Tribunal found no evidence linking them to undervaluation or misdeclaration. Thus, extending the benefit of doubt, the Tribunal set aside the penalty imposed on the CHA. Consequently, the Appeal of the Appellant-Importer was partly allowed, and the Appeal of the Appellant CHA was allowed in the specified terms, granting relief in the form of reduced fines and penalties and revocation of penalty on the CHA.