2013 (9) TMI 547 - AT - Customs

Shortage found in re-warehousing of the imported goods - Respondents are 100% EOU and having central excise registration for manufacture and also holing a Private Bonded Warehouse Licence under Section 58 of the Customs Act, 1962 - Imported goods have been re-warehoused at the Private Bonded Warehouse of the respondents and on physical verification of the said goods by the JRO, it was noticed that the goods were found short and accordingly re-warehousing certificate were submitted to ICD, Dashrath Held that - Imported goods were Brass Scrap as against declared item Brass Dross - Sufficient evidence was brought on record by the appellants to show that it was mistake on the part of the supplier in sending the wrong goods which would clearly show that there was no intention on the part of the appellants. Not only the suppliers have admitted their mistake, but also they compensated the appellants for discrepancies - Nothing incriminating evidence was found against the appellants to implicate their involvement in importing the goods other than declared - Contention of the Department that supplier has been obliging in sending Brass Scrap in the guise of Brass Dross to various importers cannot be taken as decisive factor to penalise the appellants in the absence of their involvement or connivance with Exporters in importing such wrong goods. Further, appellants have given sufficient evidences to show that the overseas supplier have loaded short quantity which also admitted by the overseas supplier. On basis of the same the quantity actual re-warehoused - There was no intention on the part of the appellants the overseas suppliers have admitted their mistake. No incriminating evidence was found against the appellants to implicate their involvement in importing the short quantity. Therefore, appellants cannot be penalised in absence of their involvement or connivance with exporters in importing such short quantity. Revenue authorities have not challenged the final assessment of bill of entry No.913. If that be so, the findings recorded by the first appellate authority and following the law as has been laid down by this Tribunal in the case of Jalanchand Mangilal vs Collector of Customs 1991 (7) TMI 229 - CEGAT, NEW DELHI is correct, as the ratio of the decision squarely covers the issue in favour of the assessee

Summary

Issues involved:
Demand of customs duty, interest, and penalty on short receipt of goods; Confiscation of goods under Section 111(o) of the Customs Act, 1962; Final assessment of bill of entry No.913; Shortage found in bill of entry No.813 & 815; Applicability of Section 111(o) for confiscation; Evidence of intention to evade duty; Involvement of overseas supplier in short quantity; Imposition of penalty, interest, and fine.

Detailed Analysis:

1. Demand of Customs Duty and Confiscation:
The case involved a dispute over the demand of customs duty, interest, and penalty on the short receipt of goods, specifically 21000 pcs of Galvanized Wire (Core Pipe) in bill of entry No.913. The Revenue contended that the goods were liable for confiscation under Section 111(o) of the Customs Act, 1962, due to the failure to fulfill conditions for utilizing the goods in an export-oriented unit. However, the first appellate authority allowed the appeal filed by the respondent-assessee, citing evidence that the overseas supplier had loaded a short quantity, which was admitted by the supplier. The final assessment of the bill of entry showed a reduced quantity of Galvanized Wire, and the appellants provided sufficient evidence to demonstrate the supplier's mistake. The tribunal held that there was no intention on the part of the appellants to evade duty, and the goods were not subject to confiscation, penalty, or fine.

2. Final Assessment of Bill of Entry No.913:
The appellate authority's decision to set aside the customs duty on bill of entry No.913 was challenged by the Revenue, arguing that the bill could not be amended under Section 149 after goods were deposited in the warehouse. However, the authority found that the final assessment of the bill of entry, which reduced the quantity of Galvanized Wire, was valid. The tribunal upheld this decision, noting that the Revenue did not challenge the final assessment and failed to provide contrary evidence to dispute the shortage explained by the overseas supplier.

3. Shortage Found in Bill of Entry No.813 & 815:
The case also addressed shortages found in bill of entry No.813 & 815, which led to a show cause notice for recovery of customs duty, interest, penalty, and fine. The tribunal's analysis focused on the evidence presented by both parties regarding the shortage, the actions of the overseas supplier, and the lack of incriminating evidence against the appellants. Relying on precedents and the supplier's admission of the mistake, the tribunal concluded that there was no basis for confiscation, penalty, or fine related to the shortages.

4. Imposition of Penalty, Interest, and Fine:
The issue of imposing penalty, interest, and fine on the short-shipped goods was thoroughly examined. The tribunal found that the appellants had provided sufficient evidence to show the overseas supplier's error in loading a short quantity. As there was no evidence of the appellants' involvement or connivance in importing the short quantity, the tribunal determined that penalties and fines were not warranted. Precedents were cited to support this decision, emphasizing the lack of intention to evade duty and the supplier's acknowledgment of the mistake.

In conclusion, the tribunal rejected the appeal filed by the Revenue, upholding the decision of the first appellate authority based on the evidence presented and the legal interpretations applied to the issues at hand. The judgment emphasized the importance of evidence, intention, and adherence to legal provisions in determining customs duties, confiscation, and penalties.