2016 (6) TMI 307 - AT - Customs

Demand of Additional Duty of Customs - Import of different types of HTC Mobile Phones - Confiscation in lieu of redemption fine and imposition of penalty - Failed to follow the procedural requirements under Notification No. 21/2012-CU - Held that - Revenue s contention in the present appeal is only that the respondent has declared in their bill of entry that the goods were meant for sale and as such the declaration so made has to be accepted. However, otherwise it is found that it is not the case of the Revenue that the goods, in question, were actually meant for sale. The respondent had made the claim in the bill of entry only because in the previous import such claims were being made. This seems to be like human error. - Decided against the revenue

Issues:
1. Classification of imported goods under Notification No. 21/2012-CUS.
2. Compliance with procedural requirements for exemption from Additional Duty of Customs.
3. Imposition of Additional Duty of Customs, confiscation of goods, and penalty.
4. Appeal against the order passed by Commissioner (Appeals).
5. Declaration of goods meant for sale in the bill of entry.

Classification of Imported Goods under Notification No. 21/2012-CUS:
The case involved the import of HTC Mobile Phones by the respondent, classified under Chapter 85171290. The respondent claimed exemption from Additional Duty of Customs under Sl. No. 87 of Notification No. 21/2012-CUS, subject to specific conditions. However, the procedural requirements for the exemption were not followed, leading to proceedings against the respondent for violation. The original Adjudicating Authority confirmed the Additional Duty of Customs, amounting to ?2.83 lakhs, along with confiscation of goods and a penalty of ?50,000.

Compliance with Procedural Requirements for Exemption from Additional Duty of Customs:
The respondent imported HTC Mobile Phones but failed to fulfill the conditions for exemption from Additional Duty of Customs as per Notification No. 21/2012-CUS. The goods were supposed to be intended for immediate sale post-importation, with the submission of a VAT registration number. Non-compliance with these requirements led to the initiation of proceedings against the respondent, resulting in the imposition of Additional Duty of Customs, confiscation of goods, and a penalty.

Imposition of Additional Duty of Customs, Confiscation of Goods, and Penalty:
The original Adjudicating Authority imposed Additional Duty of Customs, amounting to ?2.83 lakhs, on the respondent for non-compliance with procedural requirements. Additionally, the goods were confiscated with an option for redemption on payment of a fine of ?7 lakhs. A penalty of ?50,000 was also levied. However, on appeal, the Commissioner (Appeals) allowed the appeal by accepting the appellant's argument that the goods were not meant for sale but were supplied free of charge as service buffers for distribution to HTC Authorized service stations.

Appeal Against the Order Passed by Commissioner (Appeals):
The Revenue filed an appeal against the order passed by the Commissioner (Appeals) based on the respondent's declaration in the bill of entry that the goods were meant for sale. The Revenue contended that this declaration should be accepted. However, it was found that the goods were not actually intended for sale, and the declaration was made due to a past practice error. The Tribunal agreed with the Commissioner (Appeals) and rejected the Revenue's appeal, citing no justifiable reasons to interfere with the impugned order.

Declaration of Goods Meant for Sale in the Bill of Entry:
Although the respondent declared in the bill of entry that the goods were meant for sale, it was established that this declaration was an inadvertent error due to a long-standing practice of making such claims in previous imports. The Tribunal noted that the goods were not actually intended for sale, and the declaration was a result of human error. Consequently, the Tribunal upheld the Commissioner (Appeals)'s decision and rejected the Revenue's appeal.

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