2013 (11) TMI 997 - AT - Customs

Valuation of goods - Import of Pneumatic tyres - Supplier wrongly sent tyres to assessee - Assessee asked permission for re-export of goods - Mis declaration of goods - Held that - appellant, after the import of the goods and before filing the bill of entry took up the matter with the foreign supplier who agreed to have sent the wrong consignment to the appellant. As such, the prayer was made by them to re-export the goods. However, instead of deciding on the said prayer of the appellant, they were advised to file a Bill of entry. It was in these circumstances that the appellant filed a Bill of entry along with invoice numbers. When the appellant has himself brought the fact of wrong shipment to the notice of the Revenue authorities, without filing the Bill of entry, subsequent filing of bill of entry by him cannot be held to be a cause for mis-declaration of the quality or the value of the goods - imposition of any redemption fine or penalty on the allegations and findings of mis-declaration cannot be held to be justified - Decided in favour of assessee.

Summary

Issues:
1. Import of non-conforming goods without BIS standard marks.
2. Imposition of redemption fine and penalty on the appellant.
3. Request for re-export of the wrongly shipped goods.

Analysis:

Issue 1: Import of non-conforming goods without BIS standard marks
The appellant, engaged in trading of tyres, imported tyres without Bureau of Indian Standards (BIS) standard marks, which is a violation of the Pneumatic Tyres and Tubes for Automotive Vehicles (Quality Control) Order, 2009. The order prohibits the import of tyres not conforming to specified standards and not bearing the BIS mark, except for those imported by Original Equipment Manufacturers (OEMs). The appellant's tyres did not fall under any exemption category, leading to them being prohibited for import under the Customs Act, 1962. The value declared by the appellant was also found to be significantly lower than similar imports at other ports.

Issue 2: Imposition of redemption fine and penalty
The original adjudicating authority enhanced the value of the tyres and imposed a redemption fine of Rs. 15 lakhs along with a penalty of Rs. 5 lakhs under Section 112 of the Customs Act. The appellant appealed against this order, arguing that the fines were excessive, and their foreign supplier suggested clearing the goods on payment of duty. The Commissioner (Appeals) reduced the redemption fine to Rs. 7 lakhs and the penalty to Rs. 3.50 lakhs, considering it as the appellant's first such consignment without prior instances of non-compliance.

Issue 3: Request for re-export of wrongly shipped goods
The appellant requested re-export of the wrongly shipped goods after discovering the discrepancy and informing the Revenue authorities. The Tribunal considered precedents where re-export was allowed in similar cases based on the appellant's bonafide actions and immediate steps taken upon detecting the wrong shipment. The Tribunal held that no redemption fine or penalty should be imposed in such circumstances. Consequently, the Tribunal set aside the previous order and granted permission for re-export without any fines or penalties, directing the authorities to facilitate re-export within 30 days.

In conclusion, the Tribunal allowed the appellant's appeal, emphasizing the importance of immediate corrective actions upon detecting import discrepancies and highlighting the precedents supporting re-export in such cases without imposing fines or penalties.