2008 (4) TMI 128 - AT - Customs

Appellant imported leather chemicals, misdeclaring them as Synthetic Fat Liquor or Sulphonated Fish Oil to evade prohibition and the duty due - entries in the Duplex Note Book seized from the storekeeper of GPK (indenting agent) shows that imported items were leather chemicals - Correspondence recovered showed that the manipulation of documents took place with the knowledge of appellant demand and penalties are sustainable

Summary

Issues: Misdeclaration of imported goods, evasion of duty, imposition of penalties

Issue 1: Misdeclaration of imported goods
The case involved M/s. Trans Traders misdeclaring imported leather chemicals as Synthetic Fat Liquor or Sulphonated Fish Oil to evade prohibition and duty. The misdeclaration was done in connivance with the indenting agent and the supplier to avail inadmissible benefits. Evidence showed that the manipulation of shipping documents took place with the knowledge of M/s. Trans Traders. The Chief Commissioner demanded duty of Rs. 11,29,578/- short paid by the appellants and imposed penalties under various sections of the Customs Act.

Issue 2: Evasion of duty
The Chief Commissioner relied on statements and documents gathered during the investigation. Shri G. Bhaskar admitted arranging misdeclaration to help importers compete in the international market. Shri S.C Jhaveri confirmed misdeclaration in some cases. The storekeeper's register showed entries with true names of products and acronyms in brackets, indicating misdeclaration. Despite TT ordering Metalot D, they received different goods as per invoices. The Chief Commissioner rejected TT's plea, relying on evidence from GPK and statements made.

Issue 3: Imposition of penalties
In the appeal, it was argued that the Chief Commissioner wrongly assumed universal misdeclaration in imports through GPK. TT denied knowing how different products were supplied instead of Metalot D. The tribunal found that TT had specifically ordered Metalot D but received other goods, indicating misdeclaration. The evidence, including statements and documents, corroborated the modus operandi of misdeclaration. The tribunal rejected TT's plea, stating that international trade does not occur as TT claimed. Confessional statements and evidence from co-accused were deemed valid, leading to the sustainability of the demand and penalties imposed on M/s. Trans Traders.

The tribunal dismissed the appeal, upholding the demand and penalties imposed on M/s. Trans Traders for misdeclaration of imported goods and evasion of duty, based on corroborative evidence and confessional statements.