2013 (8) TMI 432 - AT - Customs

Misdeclaration of goods - of shipping bill was presented samples of the goods contained in the Container were taken and sent to CRCL for testing - Although the goods were declared by the assesse as mud Additive Chemicals that was proved to be urea in the form of white Granules which was prohibited goods u/s 2(33) Held that - It appears that fraud was committed against Revenue as was revealed from reasoned and speaking order there was a mis-declaration in the present consignment and there was attempt to defraud Revenue and surrounding circumstances question conduct of assesse - the adjudication order that the test report remained uncontroverted - Adjudicating authority had brought out the mis-declaration - Authority was quite aware of the character and nature of the goods with the classification of the goods under Customs Tariff Act, 1962 - When he could know that there was a deliberate mis-declaration to willfully export urea from India for undue enrichment he proceeded on the basis of the outcome of the investigation and materials before him. Waiver of pre deposit Penalty u/s 114and 114AA - Assesse failed to avail redemption option against prohibited goods and two years had already expired from the date of seizure - court ordered 30% of the duty to be submitted on such submission rest of the duty to be waived till the disposal of the issue decided partly in favor of assesse.

Summary

Issues: Mis-declaration of goods leading to penalty under Customs Act, 1962.

Detailed Analysis:

Issue 1: Mis-declaration of Goods and Imposition of Penalty
The appellant was penalized under Sections 114 and 114AA of the Customs Act, 1962, amounting to Rs.25 lakhs due to mis-declaration of goods. The appellant argued that there was no evidence of his involvement in the breach of law, as he was unaware of the test report by CRCL when the goods were found mis-declared. However, the Revenue contended that mis-declaration was confirmed through the test report, leading to appropriate adjudication for seizure and confiscation. The adjudicating authority highlighted the deliberate mis-declaration to export urea as 'Mud Additive Chemicals for oil well,' causing prejudice to Revenue. The authority also noted discrepancies in the appellant's dealings and suppliers, indicating subterfuge. The judgment emphasized the gravity of the matter and the need to protect Revenue's interests.

Issue 2: Adjudication Process and Evidence
The adjudication process involved examining the test report from CRCL, which revealed the mis-declaration of goods as 'urea' instead of 'Mud Additive Chemicals.' The authority considered the deliberate nature of the mis-declaration and the appellant's involvement, leading to the imposition of penalties and seizure of goods. The appellant's statements during examination under Section 108 of the Customs Act further supported the authority's findings. The investigation uncovered inconsistencies in the appellant's past consignments, suppliers, and the nature of the exported goods, strengthening the case against the appellant. The judgment highlighted the authority's detailed reasoning and the evidentiary basis for the adjudication.

Issue 3: Pre-deposit Requirement and Financial Hardship
The judgment addressed the appellant's plea for waiver or reduction of the pre-deposit amount, considering financial hardship. However, the tribunal emphasized the need to protect Revenue's interests and maintain a balance between the appellant's claims and the gravity of the mis-declaration. Citing relevant legal precedents, the tribunal ordered a pre-deposit of Rs.10 lakhs to be made in two installments, emphasizing the importance of compliance and timely payment. The judgment underscored the significance of upholding statutory requirements and the consequences of fraudulent activities on Revenue.

In conclusion, the judgment thoroughly analyzed the mis-declaration of goods, the adjudication process, and the imposition of penalties under the Customs Act, 1962. It highlighted the importance of evidence, reasoning, and compliance with legal provisions to safeguard Revenue's interests and deter fraudulent practices in international trade.