2016 (6) TMI 1216 - AT - Customs

Whether the respondent had mis-declared the imported of spares along with clearance of dredger claiming NIL rate of duty, claiming benefit under Customs N/N. 21/2002 Sl. No. 353A consequently, non-payment of SAD by N/N. 20/2006? - whether the seizure vacated by the adjudicating authority is correct or otherwise? Held that - there is no dispute as to that the spares which were found on the dredger were not sought to be cleared as individual items but were considered by the respondent as mandatory spares - the adjudicating authority was correct in vacating the seizure of the spares in respect of the goods imported by the respondent - appeal dismissed - decided against appellant.

Summary

Issues: Whether the respondent mis-declared imported spares claiming NIL rate of duty, leading to non-payment of SAD; whether the seizure of spares was correctly vacated by the adjudicating authority.

Analysis:
1. The appeal by the Revenue questioned the non-declaration of imported spares by the respondent claiming NIL duty rate under Customs Notification No. 21/2002 and non-payment of SAD under Notification No. 20/2006. The authorities suspected non-declaration of spares purchased separately, leading to re-examination and queries regarding the value and intention behind the non-disclosure. The respondent argued the spares were for future usage, had no intention to evade duty, and provided proof of payment. The adjudicating authority accepted the explanations, ruling no violation of Customs Act 1962 and no intent to evade duty, hence no penalties imposed.

2. The Departmental Representative contended that the importer failed to deliver the imported manifest of goods carried in the vessel, violating Section 111(f) of the Customs Act. The respondent did not clearly declare the imported spares separately, nor produced necessary documents during examination. The spares were not considered an integral part of the dredger, and past instances of non-declaration were highlighted.

3. The respondent's Counsel argued that the spares were declared in the remarks column, indicating they were mandatory parts for the dredger, and sought clearance accordingly. The intention was not to evade duty by clearing spares as part of the dredger.

4. The key issue examined was whether the seizure vacated by the adjudicating authority was correct. The adjudicating authority found that the spares were not concealed, as they were mentioned in the remarks column and accompanied by a list. The respondent's intention to separately declare the spares was supported by various documents, indicating no intent to clear them duty-free. The factual findings of the adjudicating authority were upheld, leading to the conclusion that the seizure of spares was correctly vacated.

In conclusion, the judgment upheld the adjudicating authority's decision to vacate the seizure of spares, finding no infirmity in the impugned order. The appeal by the Revenue was rejected, affirming the correctness and legality of the decision.