2015 (1) TMI 711 - AT - Customs

Confiscation of goods - Redemption fine - imposition of penalty for violation of Section 111(m) - Held that - Appellant imported a consignment of 500MT of 2- Ethyl Hexanol but a quantity of 15.160 MTs was received in excess in the shore tanks. Appellant filed a post B/E and paid the differential duty also. Adjudicating authority in Para 4.3 and 4.4 of the Adjudication order dated 09.10.2013 has recorded that appellant is a regular importer and has also paid duty on 515.160 MTs. It was also recorded that there is no modus involved in the import and that there could be a variation between the weight based on volume calculation and actual delivery of Cargo. Once it is held that weight of the cargo of the nature imported is liable to vary it is not coming out from the records, as to why 1% difference is condonable and 3% is not condonable. Appellant never knew that there could be any quantity in excess of what is available in the import documents and what was ordered. It is not a case for confiscation of imported goods and imposition of redemption fine. - Decided in favour of assesse.

Summary

Issues:
1. Confirmation of demand for excess quantity of imported goods and imposition of redemption fine.
2. Appeal against the demand of duty and penalty for violation of Customs Act.
3. Argument on the quantity discrepancy and justification for confiscation of goods.
4. Existence of mens rea for confiscation under Section 111(m) of the Customs Act.
5. Comparison with previous case law and justification for non-confiscation.

Analysis:
1. The appeal was filed against the confirmation of a demand for excess quantity of 15.160 MT of 2 Ethyl Hexanol in the imported cargo, along with the imposition of a redemption fine under Section 112(a) of the Customs Act, 1962. The first appellate authority set aside the duty demand but upheld the penalty for violation of Section 111(m) of the Customs Act, reducing the redemption fine.

2. The appellant's argument was based on the discrepancy in the quantity of imported goods as per shipping documents and supplier information. It was contended that the Adjudicating authority did not accuse the appellant of concealing the excess quantity. The appellant relied on a Bombay High Court judgment to support the claim that confiscation of goods was not justified.

3. The Revenue defended the first appellate authority's order, emphasizing that mens rea was not a prerequisite for making goods liable to confiscation under Section 111(m) of the Customs Act. The argument centered on the legal interpretation of the provision regarding confiscation.

4. Upon hearing both sides and reviewing the case records, it was noted that the appellant imported 500MT of 2-Ethyl Hexanol, receiving 15.160 MTs in excess. The Adjudicating authority acknowledged the regular importation by the appellant and the payment of duty on the excess quantity. The variation in weight based on volume calculation and actual delivery was considered, questioning the justification for differentiating between condonable percentage differences.

5. Referring to a previous case law, the judgment highlighted a ruling by the Mumbai High Court on similar facts, emphasizing innocence in cases of fraud by foreign suppliers. The judgment concluded that in the present case, confiscation of goods and imposition of redemption fine were not justified, aligning with the principles established in the cited case law.

In conclusion, the appeal was allowed, leading to consequential relief for the appellant based on the observations and legal interpretations presented during the proceedings.