2012 (5) TMI 274 - AT - Customs

Export under DEEC scheme - misdeclaration of goods - held that - the test reports are very clear and categorical with regard to the grade of the SS used in the manufacture of utensils/ kitchenware that were exported in the past. In the absence of any report contrary to the findings of Metallurgical expert, the bald allegations, that goods exported in the past were not made of AISI 304 Grade are not sustainable. The only ground taken by the department is that the same adjudicating Commissioner has taken a different view in two other cases. As pointed out by the Ld. Advocate, the other two cases were different and in those cases, duty benefits were taken by making duty free imports under the respective advance licences, whereas in the present case, SI have not made import of any goods under the three advance licences listed earlier and since the said licences have expired, the same cannot be used. - Decided in favor of assessee in respect of 17 Shipping Bills. Confiscation and redemption fine - in respect of other shipping bills - held that - the goods which are not available cannot be ordered to be confiscated and no redemption fine can be imposed. - The appellants are, therefore, liable to penal action for such misdeclaration. The only point in their favour is that the misdeclaration has not led to any misuse of DEEC scheme or duty free import under the impugned advanced licences and there has been no consequent revenue loss. - Taking the same into consideration, while holding that the appellants are liable for penal action, I reduce the penalty from Rs. Two lakhs to Rs. One lakh.

Summary

Issues:
1. Department's appeal challenging the adjudicating Commissioner's order on misdeclaration of goods under DEEC scheme.
2. SI's cross-objection against the departmental appeal.
3. SI's appeal against the confiscation of goods and imposition of fine and penalty.

Issue 1:
The department filed an appeal challenging the adjudicating Commissioner's order on misdeclaration of goods under the DEEC scheme. The department contended that while two consignments were found to be of a different grade, the previous 17 consignments were correctly declared under the DEEC scheme. The department argued that the adjudicating Commissioner's decision was inconsistent with his rulings in other cases. However, the Tribunal found that there was no evidence to support the misdeclaration charge for the past exports. The Tribunal noted that the test reports confirmed the goods were of the declared grade, and there was no proof of sample interchanging. The department did not challenge these findings, leading to the rejection of their appeal.

Issue 2:
SI filed a cross-objection against the departmental appeal, stating that they had obtained advance licenses but did not import any goods under them. SI argued that the cases cited by the department involved duty-free imports, unlike their situation. The Tribunal agreed with SI, emphasizing that there was no misuse of the advance licenses and no revenue loss. The Tribunal rejected the department's request for a remand, as it would serve no useful purpose due to the unique circumstances of SI's case.

Issue 3:
SI appealed against the confiscation of goods and imposition of fine and penalty. SI claimed that they had requested the conversion of DEEC Shipping Bills into free Shipping Bills, and the goods were exported without claiming any duty benefit. The Tribunal acknowledged the misdeclaration but found it surprising that authorities allowed the conversion to free Shipping Bills without any undertaking or bond. Citing legal precedents, the Tribunal set aside the confiscation and redemption fine due to the absence of the goods. However, SI was held liable for a reduced penalty of Rs. One lakh for the misdeclaration. The Tribunal partly allowed SI's appeal by reducing the penalty and overturning the confiscation and redemption fine.