2012 (10) TMI 552 - AT - Customs

Siphoning foreign currency to the abroad by overvaluing the imported goods Held that - Siphoning of money to foreign country was dropped by the FERA against the applicants, therefore, the charge of siphoning of money is not sustainable. Mis-declaration - applicant submits that in this case it is an admitted fact that the importer had declared the goods as per the invoice raised by the foreign supplier and on examination it was found that the goods were not as per the description in the invoice/bill of entry Held that - Applicants proceeded the matter with foreign supplier, who admitted the fault that the some other goods had been supplied wrongly to the importer - charge of mis-declaration of goods is also not sustainable against the applicants - applicants have made out a case for 100% waiver of pre-deposit of penalty

Summary

Issues:
Seeking waiver of pre-deposit of penalties under Section 112(a) of the Customs Act, 1962.

Analysis:
The applicants requested a waiver of pre-deposit of penalties imposed under Section 112(a) of the Customs Act, 1962. The main importer had imported goods, specifically I.C., and the main appellant, a private bonded warehouse, did not file an appeal as they had gone into liquidation. The Revenue was pursuing the matter before the official liquidator. The case involved imported goods, some of which were found to be obsolete and dummies, leading to penalties imposed on the applicants. The main importer had declared the goods as per the invoice from the foreign supplier, but discrepancies were discovered upon examination. The applicants argued that the foreign supplier had supplied different goods, as acknowledged in a letter, and denied mis-declaration. Additionally, there were allegations of siphoning money to a foreign country by one of the applicants, but proceedings under FERA had exonerated them. The Additional Commissioner opposed the stay applications, citing mis-declaration of goods as the reason for penalties. The show-cause notice included charges of siphoning foreign currency and mis-declaration of goods.

The Tribunal considered the charges of siphoning money to a foreign country, which had been dropped by FERA against the applicants, as not sustainable. Regarding the mis-declaration of goods, it was noted that the importer had initially declared the goods as per the invoice, but discrepancies were later discovered during inspection. The foreign supplier admitted fault in supplying incorrect goods, leading to the conclusion that the charge of mis-declaration was not sustainable against the applicants. Consequently, the Tribunal found that the applicants had made a case for 100% waiver of the pre-deposit of penalties. Therefore, the requirement of pre-deposit was waived, and recovery was stayed during the appeal process. The decision was made to grant relief to the applicants based on the findings related to the charges of siphoning money and mis-declaration of goods.