2016 (6) TMI 222 - AT - Customs

Confiscation in lieu of redemption fine and imposition of penalty - Mis-declaration of value of goods - exporter had not stated value of import for which the appellant was prevented to declare that in the bill of entry - no mens rea involved - Held that - prior to clearance of the goods, while the goods were in bonded warehouse, the error committed in disclosing the proper value of the import was disclosed by appellant to Customs and appropriate duty there on was paid. Learned Adjudicating Authority opined that there was no mens rea involved in this case. Looking to the gravity of Section 112(a) of the Customs Act, 1962, this is not a justifiable case to exonerate the appellant from redemption fine and penalty fully. Therefore, it is considered proper that while the goods were in bonded warehouse and proper duty was realised it is proper to order redemption fine of ₹ 1,00,000/- (Rupees One Lakh only) and penalty of ₹ 20,000/- (Rupees Twenty Thousand only) in the interest of justice. - Decided partly in favour of appellant

Summary

Issues: Misdeclaration of value, mens rea, redemption fine, penalty

In the judgment delivered by the Appellate Tribunal CESTAT CHENNAI, the issue of misdeclaration of value was addressed. The appellant, formerly known as M/s. Sesa Sterlite Ltd., sought an amendment to the cause title to reflect the correct name as M/s. Vedanta Ltd., which was allowed by the Tribunal. The learned counsel argued that there was no mens rea involved in the case as the error in value declaration was unintentional. The Tribunal noted that the appellant had disclosed the error to Customs before goods clearance and paid the appropriate duty, indicating no intention to deceive. The Adjudicating Authority concurred that there was no mens rea involved, leading to a discussion on the imposition of redemption fine and penalty.

The Tribunal considered the circumstances surrounding the case, emphasizing that the error in disclosing the proper value was rectified by the appellant before goods clearance from the bonded warehouse. The Adjudicating Authority's failure to thoroughly examine the purchase order and circumstances led to a lack of clarity on the goods ordered and terms of import. However, the Tribunal noted that misdeclaration was evident in one of the invoices, leading to the imposition of a redemption fine of Rs. 1,00,000 and a penalty of Rs. 20,000 under section 112(a) of the Customs Act, 1962. The Tribunal partially allowed the appeal, considering the gravity of the situation and the interest of justice.

In conclusion, the Tribunal acknowledged the unintentional misdeclaration of value by the appellant, leading to the imposition of a redemption fine and penalty despite the absence of mens rea. The decision highlighted the importance of rectifying errors promptly and paying the appropriate duty to mitigate penalties, underscoring the significance of compliance with customs regulations to avoid financial repercussions.