2013 (8) TMI 781 - AT - Customs

Misdeclaration - Recalling of export consignment - The manufacturer Suomotu informed the customs authority about the discrepancy in the exported consignment due some technical problem which otherwise results in mis-declaration of quantity - Revenue viewed that the action of both the appellants viz., manufacturer and exporter was contrary to law Held that - No ill design was behind the consignments nor there was wilful suppression to cause prejudice to Revenue - assessee had voluntarily approached the customs authority to call back the consignment for bonafide mistake detected by it before discovery thereof by Customs - to prevent abuse of process of law court ordered that redemption fine to be upheld - Penalty of the appellants were reduced decided in favour of assessee.

Summary

Issues:
1. Mis-declaration of quantity in exported consignment.
2. Confiscation of contents of containers.
3. Imposition of redemption fine and penalty under Customs Act, 1962.

Issue 1: Mis-declaration of quantity in exported consignment
The appellant, engaged in the manufacture of woollen carpets for export, faced discrepancies in the exported consignment, leading to mis-declaration of quantity. The manufacturer informed customs about the issue, and upon inspection, it was found that the contents in the containers did not match the description in the shipping bills. The adjudicating authority held that the mistake was deliberate as no evidence was presented to prove otherwise. This resulted in confiscation of the contents valued at Rs.29,82,179 and imposition of a redemption fine of Rs.1,00,000 on each appellant under section 114 (iii) of the Customs Act, 1962.

Issue 2: Confiscation of contents of containers
The customs authority called back the exported containers due to discrepancies reported by the manufacturer. Upon inspection, it was discovered that there was a difference in contents compared to the shipping bills. The revenue viewed the actions of both the manufacturer and exporter as contrary to the law, leading to confiscation of the contents valued at Rs.29,82,179. The adjudicating authority imposed a redemption fine of Rs.1,00,000 to redeem the goods and a penalty of Rs.29,82,179 on each of the appellants under the Customs Act, 1962.

Issue 3: Imposition of redemption fine and penalty under Customs Act, 1962
The Departmental Representative argued that the appellants failed to prove their bonafide intentions. However, upon review, it was noted that the manufacturer voluntarily approached customs to rectify the mistake before it was discovered independently. The tribunal found no ill intent or wilful suppression to prejudice the revenue. To prevent abuse of the legal process, the tribunal upheld the redemption fine but reduced the penalty imposed on each appellant to Rs.1 lakh. Both appeals were disposed of with these directions to balance the interests of the parties involved.

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