2011 (6) TMI 43 - AT - Customs

Demand - Differential duty - Confiscation - Penalty - Misdeclaration - differential duty on copper scrap which the appellants have agreed to pay does not warrant equivalent penalty under Section 114A since the ingredients specified thereunder are not present insofar as the copper scrap is concerned - this case calls for a lenient view and in this regard, as prayed for by the learned counsel for the appellants, we reduce the penalty of Rs.11,80,575/- imposed under Section 114A of the Customs Act, 1962 by an amount of Rs. 2 lakhs representing differential duty on lead scrap relay which was not found to be mis-declared - Appeal is dismissed

Summary

Issues:
1. Mis-declaration of imported scrap as lead scrap relay.
2. Revaluation of consignment leading to duty demand.
3. Confiscation of goods and imposition of penalties under Customs Act, 1962.

Issue 1: Mis-declaration of imported scrap as lead scrap relay
The impugned order discarded the declared description of 39.98 MTs of scrap as lead scrap relay, reclassifying it as copper scrap. This revaluation resulted in a confirmation of a differential duty demand of Rs.11,80,575/-. The goods were confiscated but allowed to be redeemed upon payment of a fine of Rs.3 lakhs. Penalties were imposed on the appellants under Sections 114A and 112(a) of the Customs Act, 1962.

Issue 2: Revaluation of consignment leading to duty demand
The appellant did not contest the reclassification and revaluation of part of the goods but sought a reduction in the penalties imposed. The appellant argued that the penalty under Section 114A was not justified as the entire differential duty amount did not relate to the mis-declared copper scrap. A portion of the duty related to lead scrap relay, which was correctly declared, and the appellants agreed to pay duty on a higher value for this portion.

Issue 3: Confiscation of goods and imposition of penalties under Customs Act, 1962
The Department supported the impugned order, stating that the penalties were correctly determined and should not be reduced. The Tribunal found that the mis-declaration of 39.98 MTs of scrap as lead scrap relay justified the penalty under Section 114A. However, for the portion of the duty amounting to about Rs.2 lakhs related to lead scrap relay, where there was no mis-declaration, the Tribunal reduced the penalty by Rs.2 lakhs. The penalties imposed on the other appellants were upheld as reasonable considering the differential duty involved.

In conclusion, the Tribunal partly allowed Appeal No. C/235/2003 by reducing the penalty amount imposed on M/s. Hemalatha Metal Mart from Rs.11,80,575/- to Rs.9,80,575/-. Appeal Nos. C/243 and 244/2003 were dismissed.