2016 (12) TMI 1652 - AT - Customs

Misdeclaration of goods - redemption fine - demand of DEPB credit - Held that - the appellants have declared the exact chemical formula of the product and the same has not been found to be incorrect or to be improper. The appellants have also given the description of the product as JADE Green. The DEPB rates for the description to be JADE Green (synthetic dye stuff) and exact chemical formula is different. The appellant have clearly mentioned both the descriptions. In these circumstances, so long as the appellants have specifically mentioned the chemical formula of the product exported by them, it cannot be led that there is any misdeclaration on part of the appellant. The goods are not available for confiscation and the same have not been seized or provisionally released, thus no redemption fine can be imposed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Export of goods with dual description in shipping bill leading to different DEPB rates, imposition of redemption fine and penalty under Customs Act, 1962, appeal against the order by M/s. Indokem Ltd., Managing Director, and Senior Manager.

Analysis:
The case involved the export of dye with a dual description in the shipping bill - one as 'Dyes' and the other as a chemical formula of the said dyes, attracting different rates of Duty Entitlement Pass Book (DEPB). The Revenue challenged the shipping bills, demanding DEPB credit. The matter reached the Tribunal, which remanded it for a fresh decision. Upon re-adjudication, although the goods were not available for confiscation, a redemption fine was imposed instead. Additionally, penalties were levied under Section 114 of the Customs Act, 1962, on the Managing Director and Senior Manager of M/s. Indokem Ltd. Subsequently, the aggrieved parties appealed before the Tribunal challenging the order.

The appellants argued that they accurately described the exported product in the shipping bill, providing the chemical formula along with various descriptions. They contended that by specifying the exact chemical formula, there was no misdeclaration, as the DEPB rates differed based on the generic name and the chemical formula. The appellants maintained that since they included the chemical formula along with the product name, there was no ground for misdeclaration, emphasizing compliance with the requirements.

In the Tribunal's analysis, it was observed that the appellants had indeed disclosed the precise chemical formula of the exported product, which was not found to be incorrect. The description provided by the appellants included 'JADE Green,' and the DEPB rates varied for this description compared to the exact chemical formula. As the appellants explicitly mentioned both descriptions, especially the chemical formula, the Tribunal concluded that there was no misdeclaration on their part. Moreover, since the goods were not available for confiscation and had not been seized or provisionally released, the imposition of a redemption fine was deemed unjustified, leading to the dismissal of the confiscation order.

Consequently, the Tribunal allowed all three appeals, emphasizing the accurate disclosure of the chemical formula in the shipping bill as a crucial factor in determining the absence of misdeclaration and the inapplicability of redemption fines in the absence of confiscation. The judgment was pronounced in court on 2-12-2016.