2010 (5) TMI 733 - AT - Customs

Misdeclaration of imported goods - Natural Rubber SVR 10 - It was alleged that grade of the goods was found to be mis-declared and also the goods did not conform the BIS specification - redemption fine - penalty - Held that - It is not the case where the appellant could have imported the goods on finalization of bill of entry but in this case the goods are allowed to be released only after No Objection Certificate from the rubber board conforming the BIS Standards - the conduct of the appellant as such that the appellant has taken due precaution for importation of goods, there is no deliberate violation on the part of the appellant to the provisions of the Customs Act, 1962 - redemption fine and penalty not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Confirmation of redemption fine and penalty on imported goods under DEEC Scheme misdeclared as Natural Rubber SVR 10.

Analysis:
The appellant imported goods declared as "Natural Rubber SVR 10" under the DEEC Scheme, which were later found to not conform to the BIS Specification for technical specified natural rubber (TSNR) with respect to dirt, ash, and PRI. The goods were confiscated, and a redemption fine and penalties were imposed. The appellant appealed against the confirmation of these fines and penalties.

The appellant argued that they had placed a purchase order with their foreign supplier for the goods under the DEEC Scheme, obtained an advance license, and had a sales contract specifying the quality of the goods. The foreign supplier provided a certificate of quality analysis, confirming the goods as per the purchase order. When the goods were found to be not up to BIS standard, the appellant immediately informed the supplier, who admitted the mistake and advised re-export. The appellant contended that redemption fine and penalty were not justified, citing legal precedents where redemption fine was not imposed in cases of re-export of goods.

The Departmental Representative (DR) argued that the goods were misdeclared and restricted, justifying the confiscation and penalties. The DR relied on a tribunal decision stating that restrictions on export of goods amount to prohibition when export conditions are not met. The DR emphasized that the goods were misdeclared as Natural Rubber SVR 10 and did not meet BIS specifications, supporting the imposition of fines and penalties.

After hearing both sides, the judge found that the appellant had taken all necessary precautions before importation, had not deliberately violated any provisions, and had no mala fide intentions. The judge distinguished the case from precedents cited by the DR, emphasizing the appellant's due diligence. Relying on legal precedents, the judge concluded that redemption fine and penalty were not sustainable in this case. The impugned order was set aside, and the appeal was allowed with consequential relief, if any.