2016 (11) TMI 32 - AT - Customs

Confiscation of consignment u/s 111 (m) of CA, 1962 - option to redeem on payment of redemption fine u/s 125 - imposition of penalties u/s 112 (a) - import of 60 pieces of heater - Held that - The courier bill of entry filed by the importer was accompanied with an invoice for U.S. 105 FOB. The revised invoice indicating the correct value of the import goods as U.S. 3,000 was submitted by the importer only after it was noticed by the Customs that the goods imported were under valued. Hence, it stands established that the goods have been mis-declared and, hence, is liable for confiscation under Section 111 (m) of the Customs Act, 1962. Once the goods are found to be mis-declared the same will be liable for confiscation in Section 111 (m). Accordingly redemption fine will be imposable for clearance of such goods. However, keeping in view the facts and circumstances of the case, I reduce the redemption fine to ₹ 50,000/- (Rupees Fifty Thousand) under Section 125 of the Customs Act. I also reduce the penalty imposed under Section 112 (a) to ₹ 20,000/- (Rupees Twenty Thousand). Imposition of penalties u/s 114 (AA) - Held that - false and incorrect material not found - penalty set aside. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues: Mis-declaration of imported goods, confiscation under Section 111 (m) of the Customs Act, imposition of redemption fine and penalties, challenge to the impugned order.

Analysis:
1. The appellant imported a consignment of heaters with a declared value of U.S. $105 FOB, which was later revised to U.S. $3,000 after customs examination raised suspicions of undervaluation. The original adjudication ordered confiscation under Section 111 (m) of the Customs Act, along with a redemption fine of &8377; 1,20,000, a penalty of &8377; 60,000 under Section 112 (a), and an additional penalty of &8377; 10,000 under Section 114 (AA). The Commissioner (Appeals) upheld this order, leading to the present appeal challenging the confiscation and penalties imposed.

2. The appellant argued that there was no mis-declaration as they provided the correct invoice and bank remittance certificate after the customs examination. It was contended that no mens-rea could be attributed to them, especially since the goods were examined at their request. The main contention was that the confiscation and penalties were unjustified in the absence of intentional mis-declaration.

3. The tribunal found that the revised invoice was submitted only after customs officials noticed the undervaluation, establishing the mis-declaration of goods. Consequently, the goods were held liable for confiscation under Section 111 (m) of the Customs Act. However, considering the circumstances, the redemption fine was reduced to &8377; 50,000 under Section 125 of the Customs Act, and the penalty under Section 112 (a) was reduced to &8377; 20,000.

4. Additionally, a penalty was imposed under Section 114 (AA) for the use of false and incorrect material. The tribunal, after evaluating the case, concluded that the penalty under Section 114 (AA) was not justified in the present circumstances and thus vacated the penalty.

5. In the final decision, the tribunal disposed of the appeal by upholding the confiscation under Section 111 (m) but reducing the redemption fine and penalty under Section 112 (a) while vacating the penalty under Section 114 (AA) based on the facts and circumstances of the case.