2014 (3) TMI 459 - AT - Customs

Refund of SAD which was paid at Higher Rate - waiver of pre-deposit - Held that - Even if higher SAD would have been paid by them at the time of import of earlier 27 consignments, the same would have been refunded to the importer. Revenue has not initiated proceedings against the assessee in respect of SAD already refunded to them. As such, we are of the view that differential SAD now being confirmed against the assessee, by way of impugned order, is also eligible to be refunded to them, thus making the entire situation revenue neutral - appellant directed to keep the said bank guarantee alive during the pendency of the appeal subject to which balance amount of duty and penalties imposed upon all the applicants shall stand waived and its recovery stayed during pendency of the appeal - Stay granted.

Issues:
Confirmation of total duty against importer and imposition of penalties under Customs Act.

Analysis:
The judgment involves the confirmation of total duty against an importer and the imposition of penalties under the Customs Act. The impugned order confirmed a duty of Rs.70,51,612 against the importer and imposed penalties of Rs. One crore under Section 112 read with section 114 of the Customs Act. Additionally, penalties of Rs.75 lakhs each were imposed on two directors associated with the importing and exporting firms.

The appellant had imported mobile phones and cleared them by paying the leviable duty. The order in question pertained to 27 past consignments and one live consignment. Allegations of mis-declaration and undervaluation of the mobile phones were made against the applicant. The declared value by the appellant was lower than the value determined by the Revenue, which was based on the imports of other importers. However, it was noted that the declared value of other importers was also enhanced to the same value by the Customs authorities.

Regarding the stay, it was argued that only NCCD, education cess, and special additional customs duty were leviable on the import of mobile phones, and the special additional customs duty paid by the importer was refunded upon selling the goods in the market. The differential NCCD confirmed by the Commissioner was required to be refunded, making the situation revenue-neutral concerning NCCD. The appellant had already provided a bank guarantee to cover the disputed amount of education cess and higher education cess.

The Revenue highlighted the wrong declaration of goods and the fraud allegedly committed by the appellant. It was pointed out that the appellant had misrepresented the manufacturer of the mobile phones to avoid customs action. The Customs authorities accepted manufacturer's invoices without further investigation, leading to incorrect declarations by the importer.

At a prima facie stage, the Tribunal found that the special additional customs duty paid on the import of goods was refundable to the importer upon selling the mobile phones. The confirmation of special additional duty related to previous consignments, and the Tribunal agreed that the differential duty should be refunded to the importer. The bank guarantee provided by the appellant was deemed sufficient to cover the remaining duty and penalties, leading to a waiver of the balance amount and a stay on its recovery during the appeal.

In conclusion, all four stay petitions were disposed of accordingly, with the Tribunal directing the appellant to maintain the bank guarantee during the appeal process.

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