2014 (10) TMI 632 - AT - Customs

Penalty u/s 112 - Misdeclaration of goods - Held that - Trade opinion may not be an expert opinion, but opinion based on long experience in the trade considering significant difference in the items of Indian origin and foreign origin may be of persuasive value and may not be thrown out only on the ground that trade opinion is not an expert opinion. If there are significant differences in shape, size, test etc. of betel nuts of Indian origin than the betel nuts of foreign origin the person in trade may form an opinion that it is of foreign origin which in the facts of the case may be accepted. It is evident from trade opinion that the recovered betel nuts on the basis of their shape, size and appearance appeared to be of foreign origin. on receipt of the show cause notice, both the appellants approached the Settlement Commission whereby the appellants admitted their liability on the ground that the appellants are the actual importers and also accepted and admitted the allegations and charges made in the show cause notice. In view of the admission made by both the appellants before a statutory authority i.e. the Settlement Commission regarding misdeclaration of the goods imported in the name of M/s. R.R. Exports, we find no merit in the contention of the appellants - Decided against assessee.

Issues:
1. Imposition of penalty under Section 112(a) of the Customs Act.
2. Misdeclaration of goods imported in the name of a different entity.
3. Admissions made before the Settlement Commission affecting the case outcome.

Issue 1: Imposition of Penalty under Section 112(a) of the Customs Act

The appellants challenged the penalty imposed by the Commissioner of Customs, arguing that there was no evidence to prove their prior knowledge of the misdeclaration of goods. They contended that the goods were unbranded, supported by a communication from the supplier. However, the Revenue maintained the penalties based on the Settlement Commission admissions, where the appellants accepted full duty liability and admitted to being the actual importers. The Settlement Commission rejected their applications due to the bills of entry being in the name of another entity, which did not seek settlement. The Revenue argued that the admissions made before the Settlement Commission left no grounds for the appellants to dispute the penalties.

Issue 2: Misdeclaration of Goods Imported in Another Entity's Name

The investigation revealed that goods imported under M/s. R.R. Exports' name were actually branded, contrary to the declaration. Statements from involved parties confirmed the misdeclaration, with the Customs House Agent admitting to receiving documents from the appellants and the duty being paid by one of them. Despite the appellants' claim that the goods were unbranded, their involvement in importing under a different entity's name was established. The appellants' attempt to shift blame based on lack of knowledge was refuted by the evidence presented during the investigation.

Issue 3: Admissions Before the Settlement Commission

Both appellants approached the Settlement Commission upon receiving the show cause notice and admitted to being the actual importers of the goods under M/s. R.R. Exports' name. They accepted all charges and allegations, acknowledging the misdeclaration. The Settlement Commission's rejection of their applications due to the entity named in the bills of entry not seeking settlement further solidified the Revenue's position. The Tribunal found no merit in the appellants' arguments, upholding the penalties based on their admissions before the Settlement Commission.

In conclusion, the Tribunal dismissed the appeals, emphasizing the significance of the admissions made before the Settlement Commission, which established the appellants' liability regarding the misdeclaration of goods imported in another entity's name. The penalties imposed under Section 112(a) of the Customs Act were upheld based on the evidence and admissions presented during the proceedings.

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