2008 (12) TMI 113 - AT - Customs

Heli Fuel Oil Lubricating Oil and Fuel oil imported along with rig but not included in Essentiality Certificate consequently not being declared in B/E such Non-inclusion is an accidental omission not a deliberate attempt to evade duty by suppression of facts or wilful misstatement etc. - non-inclusion of the items cannot attract S. 114A of Customs Act penalties not imposable items not available confiscation set aside penalty on CHA for abetment in mis-declaration not justified

Issues Involved:
1. Non-declaration of lubricating oil, heli fuel oil, and fuel oil in Bills of Entry.
2. Liability to pay customs duty and interest on undeclared items.
3. Imposition of penalties under Sections 112(a), 112(b), and 114A of the Customs Act, 1962.
4. Confiscation of undeclared items under Section 111(1) of the Customs Act, 1962.
5. Penalties on individuals and the Custom House Agent (CHA).

Detailed Analysis:

1. Non-declaration of lubricating oil, heli fuel oil, and fuel oil in Bills of Entry:
The appellant-companies imported drill rigs and related equipment without declaring certain quantities of lubricating oil, heli fuel oil, and fuel oil in the Bills of Entry. They contended that the omission was unintentional and that these items were covered under the conditional exemption provided by Notification No. 21/2002-Cus. dated 1-3-2002.

2. Liability to pay customs duty and interest on undeclared items:
Investigations revealed that the appellant-companies did not file Bills of Entry or pay customs duty on the undeclared items. Consequently, the authorities demanded Rs. 17,93,968/- and Rs. 19,77,980/- as customs duty. The appellant-companies voluntarily paid Rs. 21,17,628/- and Rs. 23,90,906/- towards customs duty and interest. The tribunal upheld the recovery of duty and interest as the appellant-companies did not challenge this aspect.

3. Imposition of penalties under Sections 112(a), 112(b), and 114A of the Customs Act, 1962:
The Adjudicating Authority imposed penalties on the appellant-companies and their employees. The tribunal noted that the omission to declare the items was accidental and not a deliberate attempt to evade duty. Since the items were eligible for the exemption under the notification, the tribunal set aside the penalties imposed under Section 114A, stating that the omission did not constitute suppression of facts or willful misstatement.

4. Confiscation of undeclared items under Section 111(1) of the Customs Act, 1962:
The Adjudicating Authority ordered the confiscation of the undeclared items. However, the tribunal found that the goods were consumed by the drill rigs and were not available for confiscation at the time of the show cause notice. Citing precedents, the tribunal set aside the confiscation order, stating that confiscation under Section 111(1) was not applicable when the goods were not physically available.

5. Penalties on individuals and the Custom House Agent (CHA):
Penalties were imposed on individuals and the CHA under Section 112(a) and 112(b) for their roles in the non-declaration. The tribunal set aside these penalties, noting that the main appellant-companies had owned up to the mistake and discharged the duty liability. It was determined that the CHA filed the Bill of Entry as per the client's instructions and was not instrumental in any misdeclaration.

Conclusion:
The tribunal upheld the recovery of customs duty and interest but set aside the penalties and confiscation orders. The appeals were disposed of with consequential relief, emphasizing that the non-declaration was an accidental omission and not an attempt to evade duty.

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