2015 (2) TMI 1081 - AT - Customs

STP Unit - assessee had imported certain items in excess of those assessed in the respective Bills of Entry - Confiscation of goods - Imposition of redemption fine and penalty - Notification No.52/2003-Customs - Held that - TP unit (respondent) was at liberty to obtain a procurement certificate and there was no need for the respondent to indulge in any fraud. He has also observed that there was a mix-up at the supplier s end and respondent was not aware of the excess goods. I also agree with the view taken by the learned Commissioner (A) that the respondent had paid the duty and interest. Under the circumstances, it would be appropriate to take a lenient view and set aside the penalty and redemption fine. Accordingly, I do not find any merit in the appeal filed by the Revenue - Decided against Revenue.

Summary

Issues:
Appeal against decision setting aside redemption fine and penalty under Section 112 of Customs Act, 1962.

Analysis:
The case involved an appeal by the Revenue against the decision of the Commissioner (A) setting aside the redemption fine and penalty imposed under Section 112 of the Customs Act, 1962. The appellant, an STP unit engaged in software development and communication services, imported goods under authorization from Software Technology Parks of India. Upon physical verification, it was discovered that certain items were imported in excess of what was declared in the Bills of Entry, leading to a case against the appellant for confiscation under Section 111 of the Customs Act, 1962, along with duty demands, interest, and proposed penalties. The Commissioner (A) ruled in favor of the appellant, prompting the Revenue's appeal.

The appellant argued that being a 100% EOU, there was no intention to suppress facts or receive excess goods, as they regularly supplied goods as per requirements based on pro-forma invoices. They contended that they had already paid the duty demand with interest, even though not required, due to being a 100% EOU with the necessary certificates. On the other hand, the Revenue maintained that failure to declare excess goods in the Bills of Entry rendered the goods liable for confiscation and subsequent penalties, irrespective of the unit's EOU status.

Upon review, the judge concurred with the Commissioner (A) that the appellant had no reason to engage in fraud, given their ability to obtain procurement certificates. It was noted that the mix-up leading to excess goods was at the supplier's end, and the appellant had acted in good faith by paying the duty and interest. Consequently, a lenient view was taken, setting aside the penalty and redemption fine. The appeal by the Revenue was dismissed, with any consequential relief granted to the appellant.

In conclusion, the judgment emphasized the importance of good faith actions by the appellant, the lack of fraudulent intent, and the regular compliance with duty payments. The decision highlighted the need to consider circumstances, such as supplier errors, in determining liability for penalties and confiscation, ultimately leading to the rejection of the Revenue's appeal.