2014 (1) TMI 533 - AT - Customs

Confiscation of goods - Penalty u/s 112 - Benefit of concessional rate of customs duty under Notification No.21/2002-Cus dated 01.03.2002 - Held that - as per sub-section 28 (1) (b), if any duty is discharged before the service of show case notice under sub-section 28 (1) (a), the then there is provision under sub-section 2 of section 28 (a) that no notice should be served on the person who is liable to pay said duty. We find, that the provision of section 28 (2) would clearly get attracted in this case as there was no suppression of fact, wilful misstatement on the pat of the main appellant Shreeji Shipping a fact undisputed, as the consignment was examined by lower authorities before extending the benefit of notification No. 21/2002-Cus, to the appellant; directing him to pay the custom duty as assessed under chapter heading No. 8905 9090. In our view subsequent change of mind on the part of revenue authorities, as regards the classification of the goods imported, cannot be held against the appellant as the view of assessee was a possible one, as it has been approved by the authorities, when the bill of entry was assessed finally. There was no provisional assessment nor there was any bond executed for release of the goods to the main appellant. The law laid down by the larger bench would apply in the case in hand, and it has to be held that the liability to confiscation under section 111 (m) & Customs Act, 1962, as ordered by the adjudicating authority is incorrect. We are also unable to agree to the proposition of the adjudicating authority for liability to confiscation as there is nothing on record to indicate that the appellant has mis-declared any particulars in the bill of entry filed by them while clearing the consignment. Section 111 (m) of the Customs Act, 1962 can come into play only when there is a mis-declaration of value or any particular in the bills of entry. There is no dispute that the appellant has declared their consignment correctly and was found correct on examination by lower authorities. In view of this the confiscation order by the adjudicating authority under the provision of 111 (m) is unsustainable - Decided in favour of assessee.

Issues Involved:
1. Waiver of pre-deposit of penalties under Section 112(a) of the Customs Act, 1962.
2. Correct classification of imported goods.
3. Applicability of Section 28 of the Customs Act, 1962.
4. Liability for confiscation under Section 111(m) of the Customs Act, 1962.
5. Imposition of penalties under Section 112(a) of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Waiver of Pre-deposit of Penalties:
The appellants sought the waiver of pre-deposit of penalties imposed by the adjudicating authority under Section 112(a) of the Customs Act, 1962. The tribunal allowed the applications for waiver of pre-deposit and proceeded to dispose of the appeals.

2. Correct Classification of Imported Goods:
The main appellant, M/s. Shreeji Shipping, imported a "Liebherr Four Rope Floating Cargo Crane Type CBDC" and declared it under sub-heading No. 8905 9090, availing the benefit of concessional customs duty under Notification No. 21/2002-Cus. The bill of entry was assessed with the benefit of the notification. However, the DRI officers later contended that the correct classification should be 84269990, which would not qualify for the concessional rate. The appellant paid the differential duty and interest upon being informed.

3. Applicability of Section 28 of the Customs Act, 1962:
The appellants argued that since they paid the differential duty and interest before the issuance of the show-cause notice, under Section 28(2) of the Customs Act, no show-cause notice should have been issued. The tribunal agreed, stating that there was no fraud, misstatement, or suppression of facts, and the consignment was examined and found correct by the Customs Authorities. Therefore, the provisions of Section 28(2) were applicable.

4. Liability for Confiscation under Section 111(m) of the Customs Act, 1962:
The adjudicating authority ordered the confiscation of the consignment under Section 111(m) but did not impose any redemption fine. The tribunal found that since the consignment was not seized and there was no mis-declaration, the order of confiscation was incorrect. The tribunal referred to the precedent set by the Hon'ble High Court of Andhra Pradesh and the Larger Bench of the tribunal, which held that confiscation could not be ordered if the goods were released without any bond or undertaking.

5. Imposition of Penalties under Section 112(a) of the Customs Act, 1962:
The tribunal concluded that since the order of confiscation under Section 111(m) was set aside, the imposition of penalties under Section 112(a) did not arise. The tribunal emphasized that the appellant had correctly declared the consignment, and the examination by the lower authorities confirmed this.

Conclusion:
The tribunal allowed the appeals, setting aside the penalties imposed on all appellants and holding that the consignment of the crane was not liable for confiscation. The appeals were disposed of accordingly.

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