2013 (10) TMI 413 - AT - Customs

Exemption from duty of customs on import of goods subject to reexport - Short Shipment of Goods Difference in the quantity of goods in bills - Whether the goods received by the appellant were of 91 Kgs. weight as reflected in the airway bill as also in the bill of entry or the same were 179 Kgs, as reflected in the invoices - Held that - The short receipt of the goods were also informed by the appellant to the department, as soon as they detected the same and the matter was taken up with foreign suppliers, who agreed with the short shipment and accordingly issued a new invoices -The new invoice stand rejected by the lower authorities on hyper technical grounds that new invoices mentioned the goods short received whereas the same should have mentioned short-shipped - the objection of the lower authorities is too technical - When the exporters is accepting the fact of short consigning of the goods, the customs authorities in India should not reject the same on some technical ground, especially when the air-way bill as also bill of entry mentioned the correct weight Decided in favour of Assessee.

Summary

Issues:
1. Interpretation of Customs rules regarding duty exemption for imported goods.
2. Discrepancy in weight of imported goods and subsequent actions by the appellant.
3. Customs authorities' decision on duty payment and penalty imposition.
4. Appeal against the Commissioner (Appeals) order.

Analysis:
1. The appellant, engaged in manufacturing transformers and insulators, imported goods under a Customs notification exempting duty for goods imported for specific purposes and re-exported within a stipulated period. The issue arose due to a discrepancy in the weight of goods as per invoices and actual airway bill, leading to confusion during customs clearance.

2. The appellant, upon receiving the goods and discovering the weight mismatch, promptly informed both the supplier and customs authorities about the short shipment. The supplier acknowledged the error and issued a new invoice to rectify the discrepancy. However, the customs authorities initially rejected the new invoice, citing technical grounds related to terminology.

3. Customs authorities conducted an assessment, rejecting the appellant's claim of short shipment and levying duty along with a penalty. The Commissioner (Appeals) later reduced the penalty amount. The appellant, dissatisfied with the decision, filed an appeal challenging the order-in-appeal by the Commissioner (Appeals).

4. The Tribunal, after considering the facts and submissions from both parties, focused on determining the actual weight of the imported goods. It found that the supplier acknowledged the short shipment, leading to the issuance of a corrected invoice. The Tribunal criticized the lower authorities for rejecting the corrected invoice on technical grounds, emphasizing that the substance of the issue was the short receipt of goods, not the terminology used in the new invoice.

5. Ultimately, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant. The decision highlighted the importance of substance over technicalities, especially when the supplier admitted to the error and provided a corrected document. The judgment provided consequential relief to the appellant, emphasizing fair treatment and practical considerations in customs matters.