2013 (11) TMI 545 - AT - Customs

Waiver of penalty - Repeated Mis declaration of goods - Commissioner confirmed classification of goods under 38089910 and allowed re-exportation of the goods upon payment of redemption fine - Demand of differential duty - Held that - live consignments valued at ₹ 67 lakhs, which is lying with the department is not sufficient for waiver of pre-deposit of duty and penalty. It is noticed, prima facie , that there is a communication between the applicant and the supplier regarding the change of classification. It appears that these communications were intended to change the classification for the purpose of evasion of duty. Prima face, there is material available that they have changed the classification for evasion of duty. Hence, the applicant failed to make out a strong prima facie case for waiver of pre-deposit of entire amount of dues - stay granted partly.

Summary

Issues: Classification of goods under Customs Tariff Heading, Evasion of duty, Penalty imposition, Suppression of facts, Waiver of pre-deposit of duty and penalty.

Classification of Goods under Customs Tariff Heading:
The case involved the classification of goods declared as "Plant Bio Fertilizer (liquid)" under Customs Tariff Heading 31010099 by the applicant, which the investigating officers found to be pesticides classifiable under Customs Tariff Heading No.38089910. The Commissioner confirmed the classification under 38089910, leading to the demand for differential duty and penalties against the applicant for misdeclaration and evasion of duty in past consignments. The applicant argued that the goods were not pesticides but organic materials/bio-fertilizers, citing the composition and intended use of the goods. The Tribunal considered the arguments from both sides and found evidence suggesting deliberate misclassification for duty evasion purposes.

Evasion of Duty and Penalty Imposition:
The Commissioner imposed penalties under Sections 112(a) and 114(A)/114(AA) of the Customs Act, 1962 on the applicant-Company and its Managing Partner for misdeclaration and evasion of duty in past consignments. The penalties were based on the findings of deliberate suppression and intent to evade payment of duty by changing the classification of goods. The Tribunal, after hearing both sides, found prima facie evidence of communication between the applicant and the supplier to change the classification for duty evasion purposes. The Tribunal directed the applicant to deposit a further sum of money within a specified period, indicating a lack of strong prima facie case for a complete waiver of pre-deposit of dues.

Suppression of Facts and Waiver of Pre-Deposit of Duty and Penalty:
The applicant argued that there was no suppression of facts regarding the composition of goods, as the relevant information was included in earlier consignments. They contended that the goods were not pesticides but organic materials/bio-fertilizers used with specific components. The Tribunal, however, found evidence suggesting deliberate suppression and changed classification for evasion of duty. The applicant's request for a waiver of pre-deposit of duty and penalty was partially granted, with a direction to deposit a specified amount within a set timeframe. The Tribunal considered the circumstances of the case and the communication indicating an attempt to change the classification for duty evasion purposes.

In conclusion, the judgment delves into the classification of goods, evasion of duty, penalty imposition, suppression of facts, and the waiver of pre-deposit of duty and penalty. It highlights the importance of accurate classification, the consequences of misdeclaration, and the need to comply with customs regulations to prevent duty evasion. The Tribunal's decision reflects a balance between considering the applicant's arguments and the evidence suggesting deliberate misclassification for evasion purposes.