2011 (1) TMI 877 - AT - Customs

Classification of imported goods Condensate - Commissioner has held that imported goods are correctly classifiable under CTH 27101990 and has confiscated the goods and allowed the same to be redeemed on payment of fine of Rs. 5.50 Crores. He has also demanded duty of Rs. 4,45,37,500/-. Further, penalties were imposed on seven firms/ persons and all of them are in appeal. - held that - there is no doubt that in the warehousing bills of entry filed and also in the IGM goods have been mis-declared. But for the elaborate investigations, this could not have been brought out. Therefore, the re-classification of the goods and confiscation thereof has to be upheld. We find that total value of the goods is Rs. 11,03,06,866/-, whereas the Commissioner has imposed redemption fine of Rs. 5.5 Crores. - Redemption find reduced - while upholding demand, interest and penalty on firm, personal penalties reduced. Admission of additional evidences - held that - In the normal course the expert opinion would have been rejected. However, in the interest of justice and also in view of the fact that the expert opinion is only comments on the test reports, we find that there is no harm in allowing this application. Accordingly, this application for inclusion of evidence is allowed.

Summary

Issues Involved:
1. Mis-declaration of imported goods.
2. Classification of imported goods under Customs Tariff.
3. Admission of additional evidence.
4. Imposition of penalties and fines.

Detailed Analysis:

1. Mis-declaration of Imported Goods:
The primary issue was whether the imported goods were mis-declared. The goods were declared as "Condensate," but investigations revealed discrepancies in the documentation and descriptions. The documents on board described the goods as Naphtha, Condensate, and Naphtha (Condensate). Statements from various individuals and documents recovered during the investigation indicated that the goods were not consistently described as Condensate. It was concluded that the goods were mis-declared, leading to their detention and subsequent legal proceedings.

2. Classification of Imported Goods under Customs Tariff:
The classification of the imported goods was contested. The appellants claimed the goods should be classified under CTH 2709 as Gas Condensate, supported by technical literature and expert opinion. However, the test reports from CRCL, BPCL, and GFSL did not conclusively identify the product as Gas Condensate. The reports indicated that the goods were a mixture of hydrocarbons, predominantly SKO and light diesel oil, which did not meet the specifications for Gas Condensate. The tribunal upheld the classification under CTH 27101990 as determined by the Commissioner, rejecting the appellants' claim.

3. Admission of Additional Evidence:
The appellants sought to admit additional evidence in the form of an expert opinion from Dr. G.B. Tiwari, arguing that the existing test reports were inconclusive. The tribunal allowed the admission of this evidence in the interest of justice, noting that the expert opinion commented on the test reports and could have been helpful during the initial adjudication process. However, the tribunal also noted that the appellants had not challenged the test reports or sought fresh testing during the relevant period, which weakened their position.

4. Imposition of Penalties and Fines:
The Commissioner had imposed a fine of Rs. 5.50 Crores for the redemption of the confiscated goods and demanded a duty of Rs. 4,45,37,500/-. Penalties were also imposed on various firms and individuals involved. The tribunal upheld the re-classification and confiscation of the goods but reduced the redemption fine to Rs. 1.5 Crores for M/s. Pushpal Exports Pvt. Limited and Rs. 1.25 Crores for M/s. World Link TC Bond Store. The penalties imposed on the appellants were also reduced, considering the total value of the goods and the differential duty involved. The revised penalties were as follows:
- M/s. Pushpal Exports Pvt. Limited: Rs. 60,00,000/-
- M/s. World Link TC Bond Store: Rs. 50,00,000/-
- Shri Vinrendra Kumar Gupta: Rs. 6,00,000/-
- Shri Girish Agarwal: Rs. 5,00,000/-
- Shri Hukmat Bhojwani: Rs. 4,00,000/-
- M/s. Kiran Road Lines: Rs. 2,00,000/-
- Vibhuti Shipping Pvt. Limited: Rs. 5,00,000/-

The tribunal's decision was based on the evidence of mis-declaration and the need for appropriate penalties to deter such conduct, while also considering the appellants' arguments and the specifics of the case.