2015 (3) TMI 244 - AT - Customs

Confiscation of goods - Redemption fine - Imposition of penalty - denial of DEPB - Misdeclaration of goods - Held that - Four items were sought to be exported. The first item is unstitched suit pieces Poly/Cotton Blended with embroidery and the second item is Unstitched pieces (poly/cotton blended) . The test memo is for one sample per memo. The description of goods in the test memo also refers to Unstitched suit pieces which indicates what was sent for testing was only the second item because the first item relates to Unstitched suit pieces with embroidery. The test memo does not refer to the word Embroidery' at all. Therefore the fact that the test reports indicate that two samples were tested, only means that two pieces, namely the top and bottom of the same suit piece were tested. No evidence has been shown to contradict this. It appears that the adjudicating authority himself was not sure whether the testing was for 2 items out of 4 items mentioned in the invoice or for two pieces of the same item. Therefore, the benefit has to go to the appellants and I hold that only the second item was found to be mis-declared and the DEPB amount is to be amended only for the second item. Redemption fine and personal penalty reduced - Decided partly in favour of assessee.

Summary

Issues: Appeal against order confiscating DEPB on exported goods and imposing redemption fine and penalty.

Analysis:
The appellants challenged the order confiscating DEPB on goods exported, claiming that only one item was tested instead of two as stated in the order-in-original. The advocate argued that the test memo indicated testing of one item only, consisting of two parts, and hence, denial of DEPB on two items was unjustified. It was contended that confiscating the entire consignment when misdeclaration was found in only one item was not justified. The advocate pointed out discrepancies in the adjudication order's uncertainty regarding the testing of two items versus two pieces of the same item.

After hearing both sides, the Tribunal analyzed the documents and invoices related to the export. It was observed that the test memo referred to unstitched suit pieces without embroidery, indicating that only the second item was tested. The Tribunal noted the uncertainty in the adjudication order's language, giving the benefit of the doubt to the appellants. It was held that only the second item was misdeclared, and the DEPB amount should be amended accordingly.

Regarding the confiscation of the entire consignment, the Tribunal found no factual or legal justification for confiscating goods valued at Rs. 40 lakhs when the misdeclared value was only Rs. 12.5 lakhs. Consequently, the redemption fine was reduced to Rs. 75,000, and the personal penalty under Section 114 was reduced to Rs. 12,500. The appeal was disposed of with the revised penalties imposed.