2015 (9) TMI 241 - AT - Customs

Denial of benefit of notification Confiscation of goods and imposition of redemption fine and penalty Appellant filed bill of entry declaring products as Hot Rolled Non Alloy Steel Cut Steel Sheets/Plates under CTH 7208 and claimed benefit of Notification No. 21/2002-Cus Benefit of notification was denied treating goods as defective/seconds and consequently goods were confiscated and redemption fine was imposed Held that - settled legal position that admissions made before Custom Officer is admissible evidence in proceedings undertaken under Customs Act Having admitted that goods under importation were defective and also having paid duty without any protest, appellant cannot turn around now and say that goods are prime and not defective Survey report also indicates that goods were heavily rusted and they were not prime quality Provisions of Section 111(m) are clearly attracted and confiscation of goods upheld Redemption fine is imposed to wipe out profit margin which appellant would have made in case appellant had been able to clear goods on basis of declaration Appellant had sold goods at below cost and has not made any profit in transaction In these circumstances, no justification for imposition of redemption fine. For imposition of penalty under Section 114A, there should be collusion or any wilful misstatement or suppression of facts on part of importer Revenue has not led any evidence to show that any of these elements are present There is no admission of any suppression or wilful misstatement of facts in statement given by Partner of appellant firm Therefore, charge of collusion, wilful misstatement or suppression of facts is not established Therefore, provisions of Section 114A are not attracted and accordingly, set aside Therefore demand of duty confirmed, redemption fine and penalty set aside Decided partially in favour of Assesse.

Summary

Issues:
Classification of goods under Notification No. 21/2002-Customs, Confiscation of goods under Section 111(m) of the Customs Act, Imposition of redemption fine under Section 125, Penalty under Section 114A of the Customs Act.

Classification of Goods under Notification No. 21/2002-Customs:
The appellant imported steel sheets classified under CTH 7208, claiming exemption under Notification No. 21/2002. However, discrepancies were found during inspection, revealing the goods were defective. The appellant admitted the goods were not prime quality, agreeing to pay differential duty without protest. The tribunal upheld the duty demand based on the admission and survey reports, denying the benefit of the notification.

Confiscation of Goods under Section 111(m) of the Customs Act:
Section 111(m) allows confiscation if goods differ from the declared particulars. In this case, the goods were declared as prime metal but found to be defective upon examination. The tribunal upheld the confiscation under this section due to the discrepancy between the declared and actual nature of the goods.

Imposition of Redemption Fine under Section 125:
A redemption fine of Rs. 45 lakhs was imposed to eliminate potential profit margins. However, evidence showed the appellant sold the goods below cost, incurring a loss. The tribunal found no justification for the fine as no profit was made, setting it aside based on the transaction details.

Penalty under Section 114A of the Customs Act:
The penalty imposed under Section 114A was equal to the total duty chargeable on the consignment. The tribunal noted that penalties should be based on the evasion amount, not the entire duty. As the appellant did not act with collusion or wilful misstatement, and no evidence of suppression was presented, the penalty was set aside, as it was incorrectly imposed.

In conclusion, the tribunal upheld the duty demand and denial of the notification benefit, set aside the redemption fine and penalty imposed under Section 114A. The appeal was disposed of accordingly.