2011 (2) TMI 818 - AT - Customs

Confiscation and penalty - Classification - Appellants states that indicating a wrong classification does not amount to misdeclaration - As such the decisions of the Tribunal in the case of Raj Television Network Vs. CC 2007 -TMI - 1884 - CESTAT CHENNAI held that finalization of the tariff heading under which the goods should fall is the ultimate job of the customs authorities and if the appellants have claimed wrong classification according to their limited understanding of the customs law mens rea cannot be attributed to them nor confiscation and imposition of penalty can be resorted to - Decided in favour of assessee.

Summary

Issues:
Classification, Confiscation of goods, Imposition of redemption fine, Penalty imposed

Classification Issue Analysis:
The appellants did not contest the classification and rate of duty determined by Customs authorities. The goods imported were found to be classifiable under different Chapters. The appellants agreed to forgo the exemption claimed and paid the applicable duty. The Customs authorities confiscated the goods, imposed a redemption fine, and penalty for misdeclaration of tariff heading and inapplicable exemption. The appellants argued that indicating a wrong classification does not amount to misdeclaration, citing precedent decisions. The Tribunal found no evidence to attribute mens rea to the appellants and set aside the confiscation and penalties based on the ultimate job of Customs authorities in determining tariff headings.

Confiscation Issue Analysis:
The Customs authorities confiscated the goods, imposed a redemption fine, and penalty for misdeclaration of tariff heading and inapplicable exemption. The appellants argued their ignorance and the Customs authorities' role in determining correct classification. The Tribunal found no evidence to attribute mens rea to the appellants and set aside the confiscation and penalties based on the ultimate job of Customs authorities in determining tariff headings.

Redemption Fine Issue Analysis:
The Customs authorities imposed a redemption fine due to misdeclaration of tariff heading and inapplicable exemption. The appellants argued their ignorance and the role of Customs authorities in determining correct classification. The Tribunal found no evidence to attribute mens rea to the appellants and set aside the redemption fine and penalties based on the ultimate job of Customs authorities in determining tariff headings.

Penalty Issue Analysis:
The Customs authorities imposed a penalty on the appellants for misdeclaration of tariff heading and inapplicable exemption. The appellants argued their ignorance and the role of Customs authorities in determining correct classification. The Tribunal found no evidence to attribute mens rea to the appellants and set aside the penalties based on the ultimate job of Customs authorities in determining tariff headings.