2015 (12) TMI 1637 - AT - Customs

Provisional assessment u/s 18 of CA, 1962 - penalties u/s 114A and 112(a) of Customs Act, 1962 - Held that - it would appear that the appeal confuses provisional release of seized goods with provisional assessment. Provisional assessment under Section 18 of Customs Act, 1962 is subject to furnishing a bond and appropriate security for payment of differential duty - The suspicion of undervalued imports led to provisional assessment in the present matter. The statute permits recovery of differential duty and interest. Penalty u/s 112 can be invoked only in relation to goods liable for confiscation. An order of confiscation is not a pre-condition for imposition of penalty. A finding of confiscability suffices for such penal action - The imposition of penalty u/s 112 of Customs Act, 1962 on M/s. Truwoods Pvt. Ltd. is based on such finding. There is, therefore, no lacuna in the impugned order in not having confiscated the imported goods and in not having quantified a fine for redemption of confiscated goods - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Provisional assessment under Section 18 of Customs Act, 1962.
2. Confiscation of imported goods under Section 111(m) of Customs Act, 1962.
3. Redemption of goods on payment of fine.
4. Penalty under Section 112 of Customs Act, 1962.

Analysis:

1. The case involved M/s. Truwoods Pvt. Ltd. importing wood veneers through Vishakhapatnam Port under provisional assessment. Following investigations, a show cause notice enhanced the value of the consignments, leading to a confirmed duty liability and penalties imposed by the Commissioner of Customs, Vishakhapatnam.

2. The appeal focused on setting aside the impugned order to allow confiscation under Section 111(m) of the Customs Act, 1962. The appeal by Revenue aimed to confiscate goods already cleared for home consumption, relying on legal precedents to support the proposal for confiscation.

3. The Tribunal noted that the relief sought by Revenue lacked statutory backing. The purpose of confiscation is to balance any unfair advantage gained by the importer, with the redemption fine representing the value of that advantage. However, in cases where goods are not available for confiscation, the option to pay a fine in lieu of confiscation may not be applicable.

4. The imposition of penalty under Section 112 of the Customs Act, 1962 does not always require a prior order of confiscation. In this case, the penalty imposed on M/s. Truwoods Pvt. Ltd. was based on the finding of confiscability, indicating no deficiency in the impugned order regarding confiscation or quantification of a fine for redemption.

5. The Tribunal clarified the distinction between provisional release of seized goods and provisional assessment under Section 18 of the Customs Act, 1962. Provisional assessment requires a bond and security for payment of differential duty, with no additional conditions specified. The non obstante clause limits other actions when provisional assessment is conducted without invoking Section 110 of the Customs Act, 1962.

6. The case highlighted the importance of adherence to statutory provisions in cases of provisional assessment and confiscation of goods. The Tribunal dismissed the appeal by Revenue, emphasizing the need for legal compliance and proper interpretation of relevant sections of the Customs Act, 1962.