2015 (1) TMI 672 - AT - Customs

Confiscation of goods - Imposition of redemption fine - Held that - Based on records that charge of mis-declaration made against appellant and later on in de-novo proceedings, Collector (Appeals) dropped those charges. In the mean time, the goods were kept in the warehouse. Investigations were undertaken by the department. It was clear case of section 49 of Customs Act. Ld.JCDR also pointed out that a request was made by the appellant for conversion of warehousing bill of entry into home consumption of bill of entry. I find the basic issue in this case is regarding section 49, department has alleged mis-declaration which was later on dropped by the department themselves. It was not case of section 59 as goods were not kept in the warehouse after assessment pending clearance after payment of duty. - case has been all through under section 49 as goods were kept pending completion of proceedings relating to mis-declaration. However, later on all charges were dropped. Once charges were dropped, goods initially kept in warehouse under section 49 continued under same set of proceedings. In view of this, strong case is made by the appellant. - Decided in favour of assessee.

Summary

Issues:
1. Interpretation of Hon'ble High Court order regarding warehousing of imported goods under section 59 of Customs Act.
2. Confiscation and redemption fine imposed under section 125 of Customs Act.
3. Applicability of section 59 or section 49 in the case.
4. Recovery of warehousing charges under section 59.
5. Correctness of demand under section 59 and mis-declaration allegations.
6. Request for conversion of warehousing bill of entry into home consumption bill of entry.

Analysis:

Issue 1:
The appeal was against the interpretation of the Hon'ble High Court order regarding the warehousing of imported goods under section 59 of the Customs Act. The Commissioner (Appeals) upheld the order of the Assistant Collector, stating that warehousing was permitted under section 59 based on the High Court's implied permission.

Issue 2:
The appellant's order for import of tin plates waste resulted in mild steel being received instead. The Assistant Collector confiscated the goods and imposed a redemption fine of Rs. 10 lakh under section 125 of the Customs Act, along with a penalty of Rs. 1 lakh. This decision was challenged in the appeal.

Issue 3:
The Collector (Appeals) determined the applicability of section 59 or section 49 in the case and upheld the Assistant Collector's decision to encash the bank guarantee for warehousing charges, stating that warehousing of imported goods was permitted under section 59.

Issue 4:
The appellant argued in the second round of litigation that their case fell under section 49, not section 59, as there was no mis-declaration. They contended that the goods were not warehoused pending duty payment, and interest charges would apply if warehoused under section 59.

Issue 5:
The mis-declaration allegations were dropped after de novo proceedings, and it was clarified that the goods were kept pending completion of proceedings under section 49. The appellant requested conversion of the warehousing bill of entry into a home consumption bill of entry, emphasizing that the case did not fall under section 59.

Issue 6:
Considering the facts and proceedings, the Tribunal found merit in the appellant's argument that the case consistently fell under section 49, especially after the mis-declaration charges were dropped. The appeal was allowed based on the understanding that the goods were under section 49 pending completion of proceedings related to mis-declaration.