2018 (3) TMI 1678 - AT - Customs

Penalty u/s 114 of CA - DFIA Scheme - suppressing material particular pertaining to the goods in the export of ladies midis with intent to avail unearned entitlement to import fabrics - Held that - There is a prescribed form that is to be subscribed to by the exporter. There is nothing on record to indicate that the details found to be deficit in the impugned order can be incorporated in the prescribed form. The invoking of the prescriptions in section 50 of Customs Act, 1962 for the purpose of determining confiscability of the export goods must necessarily be related to the entries prescribed for the purposes of assessment and grant of let export order. The various requirements of declaration under the DFIA scheme, separately for pre-import and post-export, are for compliance with the scheme and cannot be a prescription under Customs Act, 1962 unless specified particularly. The invoking of section 113 (d) would therefore, not appear to be a valid application of the law. Section 113(i) of Customs Act, 1962 is invokable for nonconformity of goods with any material particular declared in the shipping bill - In the absence of a finding on the value of export goods, confiscation under section 113(i) of Customs Act, 1962 would fail. Without the sustenance of the confiscation of the goods, the imposition of penalties is incorrect - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeals seeking relief from penalty under section 114 of Customs Act imposed by Commissioner of Customs, Kolkata for alleged suppression and misdeclaration in export of goods under DFIA scheme.

Analysis:
1. The impugned orders found the appellants guilty of suppressing material particulars in export of 'ladies midis' to avail undeserved import entitlement, leading to penalties and deprivation of DFIA scheme privileges.
2. The adjudicating authority based its decision on incorrect fabric declaration, expert opinions, and high wastage, contravening Customs Act sections 50, 113(d), and 113(i) for misdeclaration and confiscation of goods.
3. Appellants argued lack of evidence, merchant exporter status, and non-countermanded shipping bill approval, questioning the retrospective application of norms committee decisions.
4. Revenue's counsel supported the reliance on DFIA scheme conditions and Foreign Trade Policy norms for confiscation and penalties.
5. The Tribunal emphasized adherence to Customs Act provisions for duty recovery, confiscation, and denied benefits of DFIA without proper grounds, highlighting the necessity of compliance.
6. The invocation of section 50 for confiscability and the requirements under DFIA scheme were scrutinized, questioning the validity of applying section 113(d) in this context.
7. Section 113(i) was analyzed for nonconformity in goods declaration, emphasizing the need for revaluation to sustain confiscation, which was lacking in the impugned order.
8. The Tribunal concluded that without sustained confiscation, penalties were unwarranted, leading to setting aside of impugned orders and allowing the appeals.