2016 (12) TMI 639 - AT - Customs

Confiscation - DEPB benefit - mis-declaration of description of goods - Held that - We find that the claim on DEPB appellant has given up the claim hence, we upheld the denial of DEPB claimed by the appellant. Now the issue to be decided whether adjudicating authority is correct in confiscating the goods, imposing penalty and fine. We find that it is admitted fact that the goods were never seized or not released provisionally on the execution of bond and bank guarantee therefore in case when the goods were not seized and released provisionally and the goods are not available then confiscation of such goods is not correct which has been settled in various judgments, in particular, the judgment in case of Shiv Kripa Ispat Pvt Ltd Vs. Commissioner of C. Ex. & Cus, Nashik 2009 (1) TMI 124 - CESTAT MUMBAI supports the present case. In view of the settled legal position on this issue, we find that adjudicating authority was not suppose to confiscate the goods. As regard the redemption fine, redemption fine is imposed only for redeeming the goods which was under confiscation. The goods are not available, redeeming such goods is out of question, therefore redemption fine of ₹ 7,50,000/- is not sustainable. As regard the penalty of ₹ 5 lacs imposed on the appellant, we find that firstly confiscation is not sustainable. As regard the mis-declaration of the goods the Adjudicating authority itself arrived at the value of ₹ 5 Lacs in respect of export of goods and not FOB value of ₹ 27,89,568/- therefore considering overall facts and correct FOB value of the exports goods, we are of the view that penalty of ₹ 5 lacs is much on higher side which deserves to be reduced. We therefore reduce the penalty from ₹ 5 lakhs to ₹ 1 lakh. Impugned order stands modified to the above extent. Appeal is partly allowed.

Summary

Issues:
1. Mis-declaration of goods in shipping documents.
2. Confiscation of goods under Section 113(d) of the Customs Act, 1962.
3. Imposition of fine and penalty.
4. Denial of DEPB claim.
5. Legal validity of confiscation and penalties.

Mis-declaration of Goods:
The appellant filed a shipping bill for exporting Eau-De-Perfume, declaring a specific composition of the goods. However, upon investigation, it was found that the composition was not correctly declared, leading to mis-declaration and an inflated value of the goods. The correct composition rendered the appellant ineligible for DEPB benefits. The Commissioner held the goods liable for confiscation under Section 113(d) of the Customs Act, 1962, imposing a fine and penalty.

Confiscation of Goods and Imposition of Fine and Penalty:
The appellant contested the confiscation of goods, arguing that as the goods were never seized or provisionally released, confiscation was illegal. The Tribunal agreed, citing precedents and settled legal positions. It noted that confiscation without seizure or provisional release is incorrect. Additionally, the redemption fine imposed was deemed unsustainable due to the unavailability of the goods. The penalty imposed was also considered excessive, leading to a reduction from ?5 lakhs to ?1 lakh.

Denial of DEPB Claim:
The appellant conceded not pressing for DEPB benefits, leading to the denial of the claim by the Tribunal.

Legal Validity of Confiscation and Penalties:
The Tribunal found that the adjudicating authority erred in confiscating the goods without seizure or provisional release. The redemption fine was deemed inapplicable due to the absence of goods for redemption. The penalty imposed was reduced considering the correct FOB value of the exported goods. The Tribunal modified the impugned order, partially allowing the appeal and reducing the penalty to ?1 lakh.

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