2016 (12) TMI 1651 - AT - Customs

Mis-declaration of its description in their export consignment - appellant case is that since they have already lost DFRC benefit in this case, leniency in redemption fine and penalty may be given - Held that - it is a case of blatant mis-declaration of export products. The composition of the product was declared to be approximately 90% silk and 10% viscose yarn, whereas on testing it was found to be opposite - It is difficult to believe that the difference in the stated description and the description found on examination can be due to inadvertence. The marginal difference can be result of inadvertence in taking the sample from different places of the consignment. In the case, the difference of this magnitude, it cannot be due to inadvertence. The case is of blatant mis-declaration in order to defraud the Revenue, therefore, penalty imposed on M/s. Rainbow Silks and its partner is upheld - however, quantum of redemption fine reduced. Appeal allowed in part.

Summary

Issues: Mis-declaration of export consignment, confiscation of goods, redemption fine, denial of import duty benefit, penalty imposition.

Analysis:
The case involved M/s. Rainbow Silk and its partner being booked for mis-declaration of their export consignment. The goods were seized, leading to their confiscation and imposition of a redemption fine of ?3 lakhs. Additionally, the ineligible import duty benefit in the form of DFRC was denied, amounting to ?10,46,421/- and ?3,66,265/-. Penalties of ?1 lakh on M/s. Rainbow Silks and ?50,000 on the partner were also imposed. The appellants challenged this order before the Tribunal.

The appellant's counsel did not contest the mis-declaration but requested leniency in the redemption fine and penalty due to the loss of DFRC benefit. The Tribunal noted the blatant mis-declaration where the composition of the product was inaccurately declared as 90% silk and 10% viscose yarn, whereas testing revealed the opposite. The defense that the sample was taken from the edges containing embroidery was rejected, as the actual content was 9.4% natural silk and the rest viscose yarn. The difference was deemed significant to be mere inadvertence, especially considering the value of the confiscated consignment.

The Tribunal found the redemption fine of ?3 lakhs excessive given the consignment's value and reduced it to ?1 lakh. Upholding the penalty on M/s. Rainbow Silks and its partner, the Tribunal concluded that the mis-declaration was intentional to defraud the Revenue. Therefore, the penalties were maintained. The appeals were partly allowed, and the decision was pronounced on 2-12-2016.