2011 (3) TMI 233 - AT - Customs

Misdeclaration of description and value of the goods - Confiscation - Penalty - The re-examination reports had clearly brought out the fact that the consignments were composed mainly of serviceable stainless steel sheets, whereas what was declared in the bills of entry was stainless steel melting scrap - The examination of the goods took place at a posterior stage - The appellants cannot be allowed to bank on a subsequent event so as to wriggle out of the above mandatory requirement - The confiscation is therefore liable to be sustained The penalty imposed by the adjudicating authority on each appellant is only Rs. 50,000, from which it appears that the learned Commissioner was very fair to the appellants - In the result, both the appeals get dismissed

Summary

Issues:
Misdeclaration of description and value of goods, Violation of Foreign Trade Policy, Confiscation of goods under Customs Act, Imposition of fines and penalties.

Analysis:
The appeals were filed by two importers who declared Stainless Steel Melting Scrap Grade 304. However, upon examination, it was found that the consignments also contained secondary/defective stainless steel sheets and strips. The Customs authorities seized the goods under Section 110 of the Customs Act due to misdeclaration. Statements were recorded, and it was revealed that the importers had misdeclared the goods. Show-cause notices were issued for misdeclaration and violation of the Foreign Trade Policy by not producing a Pre-shipment Inspection Certificate. The Commissioner of Customs passed orders confiscating the goods and imposing fines and penalties on both importers.

The importers claimed that the goods were ultimately used for melting only and that the non-production of the inspection certificate was a technical lapse. The department argued that misdeclaration was admitted and that the importers should have produced the required certificate. The Commissioner's decision to confiscate the goods and impose fines and penalties was challenged in the appeals.

The Tribunal found that the importers had admitted misdeclaration of the goods' description and value. The examination reports confirmed that the consignments contained mainly serviceable stainless steel sheets, contrary to what was declared. The failure to produce the Pre-shipment Inspection Certificate as required by the Foreign Trade Policy was a violation. The Tribunal upheld the Commissioner's decision to confiscate the goods under Section 111(d) and (m) of the Customs Act.

The Tribunal considered the value of the goods and the fines imposed on the importers. It was concluded that the redemption fines and penalties were reasonable given the admitted misdeclaration. The appeals were dismissed, affirming the confiscation of goods and imposition of fines and penalties.