2019 (1) TMI 1736 - AT - Customs

Confiscation - imposition of penalty - Detrimental consequences arising from what is considered to be a mere oversight having negligible impact on duty and arising from their own volunteering of information - HELD THAT - It is clear from the records that after the assessment of the warehousing bill of entry the importer realized the error in the declaration of value and sought intervention under the statutory provision appropriate for the circumstances. That the goods were purchased while on high seas and the differential value was not of such significance could have led to the oversight and in any case was hardly worth evading. Doubtlessly the goods being entered for warehousing would have been subject to assessment again at the time of clearance. There appears therefore no prejudice to the interest of Revenue. In these circumstances resort to confiscation under Section 111(m) and penalty under Section 112 of Customs Act 1962 does not appear to be justified. The appeal is allowed by setting aside the confiscation and penalty.

Summary

Issues:
Challenge to order of confiscation and penalty in relation to Bills of Entry. Interpretation of provisions of Customs Act, 1962 regarding amendment of bill of entry and computation of duty liability. Application of precedents in similar cases to determine the outcome.

Analysis:
The case involved a challenge by M/s. Steel Mart India Pvt. Ltd. against the order of confiscation and imposition of penalty related to three Bills of Entry. The appellant had filed a bill of entry for high seas sales purchase of steel bars, but upon discovering a discrepancy in the high seas sales agreement not being provided to the Customs House Agent, they voluntarily disclosed the actual transaction value to Customs Authorities for amendment. The Commissioner of Customs initiated proceedings for misdeclaration, resulting in duty liability determination, redemption of confiscated goods, and imposition of penalty. The appellant argued that the duty implication was minimal, and they had proactively computed the differential duty, citing provisions of Section 145 of Customs Act, 1962 for amendment of bill of entry. They also relied on precedents such as Sea Gold Aqua Farms Ltd. and U.P. State Sugar Corporation Ltd. to support their case.

Upon hearing the arguments, the Tribunal observed that the importer had acknowledged the error in value declaration post-assessment and sought correction under statutory provisions. The differential value discrepancy, arising from a high seas purchase, was not substantial and did not warrant confiscation or penalty. The goods were intended for warehousing, subject to reassessment upon clearance, indicating no prejudice to Revenue interests. Consequently, the Tribunal found no justification for confiscation under Section 111(m) and penalty under Section 112 of the Customs Act, 1962.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal by overturning the confiscation and penalty. The judgment emphasized the importance of voluntary disclosure, minimal duty implication, and lack of prejudice to Revenue interests in the decision-making process. The case highlighted the significance of procedural fairness and adherence to statutory provisions in customs matters, ensuring equitable outcomes for importers while safeguarding Revenue concerns.

(Pronounced in Court on 18-1-2019)