2007 (11) TMI 56 - AT - Customs

Willful misdeclaration of goods by importer as cotton fabrics Importer took up the matter with the supplier immediately on detection & requested the Dept. for permission to re-export Redemption fine & penalty are reduced Permission allowed for re-export

Summary

Issues:
1. Misdeclaration of imported goods leading to duty evasion and confiscation.
2. Request for re-export of the goods.
3. Reasonableness of redemption fine and penalty imposed.

Analysis:

Issue 1: Misdeclaration of imported goods leading to duty evasion and confiscation
The appellants imported goods declared as 100% cotton fabrics but were found to be corduroy fabrics and denim fabrics attracting higher duties. The Customs authorities seized the goods, issued a show-cause notice, and imposed duty, confiscation, and penalty. The party did not respond to the notice, leading to confirmation of duty demand, goods confiscation, and penalty imposition by the Additional Commissioner of Customs. The appeal against this decision was dismissed by the Commissioner (Appeals), leading to the present appeal.

Issue 2: Request for re-export of the goods
Upon discovering the misdeclaration, the appellants contacted their supplier, who confirmed the mistake in dispatching the wrong goods. The original authority rejected the request for re-export, considering it an afterthought. The appellants cited judicial authorities to support their plea for re-export, but the lower authorities upheld the decision to deny re-export. The Tribunal examined past cases cited by both parties but found the circumstances of the present case to be different. The Tribunal noted that while misdeclaration warranted confiscation, the request for re-export should have been considered favorably, given the supplier's admission of the mistake. The Tribunal reduced the redemption fine and penalty imposed by the lower authorities.

Issue 3: Reasonableness of redemption fine and penalty imposed
The Tribunal found the fine and penalty imposed by the lower authorities to be disproportionate to the circumstances. The fine of Rs. 5 lakhs and penalty of Rs. 4 lakhs were reduced to Rs. 3 lakhs and Rs. 2 lakhs, respectively. The Tribunal allowed re-export of the goods upon payment of the revised fine and penalty, without requiring additional duty payment. The decision was made based on the misdeclaration of goods by the importer and the corresponding penalty under the Customs Act.

In conclusion, the appeal was disposed of with the appellants being permitted to re-export the goods upon payment of the revised fine and penalty, without the need for additional duty payment.