2010 (10) TMI 395 - AT - Customs

Confiscation - DEPB Benefit - Classification and valuation - whether exports were made making mis-declaration of description and value of goods to invite the consequence of adjudication and whether redemption fine was imposable - No cogent evidence was led to show that the goods were not over-valued. Result of enquiry proved misdeclaration - It is a fraud in law if a party makes representations, which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad. It is also well settled that mis-representation itself amounts to fraud - When the Assessee made misdeclaration as to value of goods, the burden of proof was on the declarant - Once goods were confiscable for commitment of an offence under law, the offence so committed cannot be construed to be an act of innocence by compromise or surrender to law - Decided against the assessee

Issues Involved:
1. Confiscation of goods under Section 113(d) of the Customs Act, 1962.
2. Imposition of penalty under Section 114 of the Customs Act, 1962.
3. Denial of DEPB benefits.
4. Non-imposition of redemption fine by the Adjudicating Authority.

Detailed Analysis:

1. Confiscation of Goods under Section 113(d) of the Customs Act, 1962:
The assessee exported items under misdeclared descriptions and inflated values to fraudulently claim higher DEPB benefits. The market enquiry revealed the actual values of the goods to be significantly lower than declared. The goods were seized under Section 110 of the Customs Act, 1962, and later provisionally released against a bond and bank guarantee. The investigation established that the goods were misdeclared in terms of description and value. The items described as "Cold Chisel," "Gate Latch," and "Garden Rakes" were found to be "Tent Peg," "Aldrop," and parts of garden rakes, respectively. The goods were thus liable for confiscation under Section 113(d) of the Customs Act, 1962.

2. Imposition of Penalty under Section 114 of the Customs Act, 1962:
A penalty of Rs. 2,00,000/- was imposed on the assessee for the misdeclaration and overvaluation of goods. The evidence, including the CRCL report and market enquiry, supported the conclusion that the assessee intentionally misdeclared the goods to claim undue export benefits. The penalty was justified under Section 114 of the Customs Act, 1962, for the fraudulent act committed by the assessee.

3. Denial of DEPB Benefits:
The DEPB benefits were denied as the goods were misdeclared in terms of description and value. The items exported did not conform to the descriptions provided in the shipping bills, and their actual market values were significantly lower than declared. The investigation revealed that the assessee inflated the values to claim higher DEPB benefits, which were not justified. Therefore, the denial of DEPB benefits was upheld.

4. Non-Imposition of Redemption Fine by the Adjudicating Authority:
The Revenue appealed against the non-imposition of redemption fine on the goods that were provisionally released. The Tribunal held that the goods were liable for confiscation and that redemption fine should have been imposed. The adjudicating authority was directed to impose an appropriate redemption fine after granting an opportunity of hearing to the assessee. The Tribunal concluded that both redemption fine and penalties were imposable due to the fraudulent acts committed by the assessee.

Conclusion:
The Tribunal dismissed the assessee's appeal, holding that the misdeclaration and overvaluation of goods were established, and the goods were rightly confiscated under Section 113(d) of the Customs Act, 1962. The penalty under Section 114 was justified. The Revenue's appeal was allowed, directing the adjudicating authority to impose an appropriate redemption fine. The judgment emphasized the seriousness of fraud and misrepresentation in customs declarations and the necessity of imposing penalties and fines to deter such fraudulent activities.

← Previous Next →