2015 (3) TMI 420 - AT - Customs

Mis-declaration of description of goods - Smuggling of goods - imposition of penalty - Held that - Goods were found to be mis-declared in its description when the unmutilated goods were found as against declared mutilated goods in the shipping documents and other connected documents. The appellant cleared the bills making payment through Indian Bank. This is recorded by ld. Adjudicating authority in para 19 (5) of his order. He has recorded the sequential evidence in such a manner, that reflects his proper application of mind as to his minute examination of the gravity of the case. Subsequent arrangement between the appellant and consigner is vividly clear as the letter sent on 07.12.2007 shows the date thereon as 17.01.2007. Once the goods were misdeclared that becomes smuggled goods under section 2(39) of the Customs Act 1962. This is done by misdeclaration and fabricating evidence and antedating the same. Record does not reveal bonafide of the consignor as well as the consignee who had hand in glove for misdeclaring description of the goods. The appellant was admittedly to be beneficiary of the goods imported fraudulently. Even though the appellant has not filed the bill of entry, the appellant is answerable under the law to the import by its intimate connection with the above smuggling. The goods became dutiable under section 12 of the Customs Act 1962. Accordingly, the appellant importer is answerable for the mis-declaration. The appellant did not come out with clean hands to prove without leaving any doubt against the mis-declaration. The goods were proved to be smuggled goods. That became property of the state. Re-export of the above import was not sought by the appellant. - However, penalty is reduced - Decided partly in favour of assessee.

Summary

Issues: Mis-declaration of goods leading to confiscation and penalty imposition.

Analysis:
1. The appellant contested the adjudication, arguing that despite the consignee's order to send mutilated goods, the consigner mistakenly sent unmutilated rags to Pakistan. Customs inspection revealed the mis-declaration, leading to allegations against the appellant. However, the appellant demonstrated correspondence between the consignee and consigner to rectify the error, with the consigner agreeing to compensate, as evidenced by a filed affidavit.

2. The appellant objected to the imposed penalty of Rs. 3,00,000, citing significant losses already suffered due to the confiscated goods not being claimed. The appellant expressed willingness for the goods to be auctioned, which had already occurred. Given these circumstances, the appellant argued that the penalty was unjustified.

3. The Revenue contended that mis-declaration of goods warranted confiscation, and since the appellant did not redeem the goods, they were rightfully confiscated, leading to the penalty imposition of Rs. 3,00,000.

4. After hearing both sides and examining the records, it was established that the goods were indeed mis-declared, with unmutilated goods being sent instead of declared mutilated ones. The adjudicating authority meticulously analyzed the evidence, highlighting the gravity of the case.

5. The records confirmed the mis-declaration, leading to the goods being considered smuggled under the Customs Act 1962. The appellant's involvement in the import of these goods was evident, making them liable for the mis-declaration and duty payment. Despite lacking a bill of entry, the appellant's association with the smuggling rendered them accountable under the law.

6. The appellant's counsel referenced a Supreme Court case for immunity, but distinctions were drawn due to the absence of an import license and the lack of re-export intentions in the present case. The penalty was reduced from Rs. 3,00,000 to Rs. 2,00,000, considering the circumstances and the lack of interest in re-export, indicating collusion between the parties.

This detailed analysis covers the issues of mis-declaration of goods, confiscation, penalty imposition, legal arguments presented, and the final decision of reducing the penalty amount.