2016 (3) TMI 192 - AT - Customs

Setting aside of Redemption fine and penalty - Appellant imported CR coils but it appears that shipper have wrongly dispatched galvanised coils - But revenue made it a case of misdeclaration and revalued the goods and also held the goods liable for confiscation redeemable by paying redemption fine and penalty under Section 112 of the Customs Act, 1962 - Held that the appellant have filed the bill of entry as per the documents, that is bill of lading, packing list, etc. and the appellants stand that they had ordered for CR coils whereas the shipper, as the ordered goods were not available dispatched galvanised coils, have not been found to be untrue. There was some mischief or consensus between the shipper and the importer, the paper slips found on the imported goods that the goods are galvanised coils. There is no case of deliberate misdeclaration of facts and circumstances, therefore, the redemption fine and penalty are set aside. - Decided in favour of appellant with consequential relief

Summary

Issues: Appeal against Order-in-Original regarding misdeclaration of imported goods, valuation based on contemporaneous import data, confiscation under section 111 of Customs Act, redemption fine, penalty under section 112 of the Act.

Analysis:
1. Misdeclaration of Imported Goods:
The Appellant, M/s Bindal Enterprises, filed a bill of entry declaring goods as C.R. Coils but upon examination, it was found that the coils were galvanized coils instead. The weight of the goods was also short by 775 kgs. The shipper had dispatched the wrong goods due to unavailability of the ordered CR coils. The revenue valued the goods based on a chartered engineer's report and adopted NIDB data for customs valuation.

2. Valuation Based on Contemporaneous Import Data:
The order-in-original revalued the goods at a higher value of &8377; 52,00,410 based on NIDB data, as the declared transaction value was deemed unacceptable. The goods were held liable for confiscation under section 111 of the Customs Act, with a redemption fine of &8377; 10.00 lakhs and a penalty of &8377; 1.00 lakh imposed under section 112 of the Act.

3. Appeal and Arguments:
The Appellant appealed, arguing that the variation in goods was due to the shipper's error, as acknowledged in a letter. The importer had no incentive for misdeclaration, and the differential duty was only about 10%. The Appellant accepted the valuation, denying any deliberate misdeclaration and contumacious conduct, seeking to set aside the redemption fine and penalty.

4. Contentions and Decision:
The Departmental Representative (DR) contended that misdeclaration was a common trade practice to save on customs duty, supporting the impugned order. The Tribunal found that the Appellant had filed documents as per the bill of entry and that the explanation regarding the ordered CR coils being dispatched as galvanized coils was not proven untrue. There was no evidence of deliberate misdeclaration or collusion between the shipper and importer. Consequently, the appeal was allowed, setting aside the redemption fine and penalty, granting the Appellant any consequential benefits as per law.