2015 (3) TMI 1035 - AT - Customs

Waiver of pre deposit - Misdeclaration of penalty - Imposition of penalty - Held that - It is a case of misdeclaration of goods. It is seen that the adjudicating authority classified the goods on the basis of materials available in the form of brochure, statement, price list and labels which are recovered from the importer's premises. Prima facie , we find that the demand was raised on the basis of some materials. Hence the importer failed to make a strong prima facie case for waiver of entire amount of duty along with interest and penalty. On a query from the Bench, Ld. AR submits that most of the goods are cleared by the importer. In view of that, we direct the applicant M/s. Cell Code Nutrition India Pvt. Ltd. to make a predeposit of ₹ 30,00,000/- (Rupees Thirty lakhs only) and its Managing Director, Shri M. Sivasakthivelu to make a sum of ₹ 40,000/- towards predeposit. Upon deposit of the said amount, predeposit of balance amount of duty along with interest and penalty against M/s. Cell Code Nutrition India Pvt. Ltd. and balance amount of penalty on Sri M. Sivasakthivelu is waived and recovery thereof stayed till disposal of appeal. Regarding imposition of penalty on M/s.Sass Global Logistics and M/s. Sri Rajeswari International, we find that both are CHAs and their licences have already been suspended. In view of that we waive predeposit of penalty in the case of M/s.Sass Global Logistics and M/s. Sri Rajeswari International. - Regarding imposition of penalty on Shri Venkatesan, Freight Forwarding Agent, prima facie we find from the records that he is the co-ordinator of the operations of the misdeclaration of the goods. Hence we direct Shri S. Venkatesan to make a predeposit of ₹ 25,000. Upon deposit of the said amount, predeposit of balance penalty shall stand waived and recovery thereof stayed till disposal of appeal. - Partial stay granted.

Summary

Issues:
Waiver of penalty for various applicants; Misdeclaration of goods classification; Imposition of penalty on different parties involved in the case.

Waiver of Penalty:
The judgment involves multiple applications seeking a waiver of penalties imposed on different parties. The advocates representing the applicants argued for the waiver based on various grounds. One advocate prayed for the waiver of a penalty of Rs. 3 lakhs, while another sought a waiver of Rs. 50,000. The Tribunal noted previous orders regarding adjournments and proceeded to hear the arguments presented by the advocates. After considering the submissions, the Tribunal directed specific amounts as predeposit for certain applicants and waived the remaining penalty amounts, subject to compliance within a specified timeline.

Misdeclaration of Goods Classification:
The case revolved around the misdeclaration of goods by M/s. Cell Code Nutrition India Pvt. Ltd. The company imported Concentrated Mineral Drops (CMD) and Nano CelluSil, declaring them as pharmaceutical products under Tariff Item 30.04. However, the adjudicating authority classified the goods under Tariff Item 21069099 as "other Food Preparation not elsewhere specified or included." The Revenue argued that the importer misrepresented the goods as "medicaments" while describing them as "Food Supplement" in their brochure. The Tribunal found that the demand was based on materials recovered from the importer's premises, indicating a misdeclaration of goods. Consequently, the Tribunal directed M/s. Cell Code Nutrition India Pvt. Ltd. to make a predeposit of Rs. 30,00,000 and the Managing Director to deposit Rs. 40,000, with the remaining amounts waived pending appeal disposal.

Imposition of Penalty on Different Parties:
The judgment addressed the imposition of penalties on various entities involved in the misdeclaration case. M/s. Sass Global Logistics and M/s. Sri Rajeswari International, both Customs House Agents (CHAs), faced penalties, resulting in the suspension of their licenses. The Tribunal waived the predeposit of penalties for these CHAs due to the license suspension. However, Shri Venkatesan, a Freight Forwarding Agent, was directed to make a predeposit of Rs. 25,000 as he was identified as the coordinator of the misdeclaration operations. The judgment specified timelines for the deposit of the directed amounts and mandated compliance reporting by a set date.

In conclusion, the judgment by the Appellate Tribunal CESTAT Chennai addressed multiple issues related to the waiver of penalties, misdeclaration of goods classification, and imposition of penalties on different parties involved in the case. The detailed analysis provided insights into the arguments presented, the findings of the Tribunal, and the directives issued regarding predeposits and penalty waivers.