2017 (2) TMI 353 - AT - Customs

EPCG Scheme - benefit of exemption - import of Magnetic Mixers/agitators with mixing head, drive unit and accessories in SKD position - denial on the ground that the goods imported was not covered by the EPCG Licence - whether it is permitted to import individual components in different bill of entries? - Held that - the three components have always been imported in sets and are assembled on the vessel independently. There is no bar on importing the sets as individual components and therefore the argument of the Revenue that components have been imported and the same are not covered by EPCG Licence does not hold any weight. From the table in first para of this order, it is seen that the quantity imported has always been within the limit prescribed in the EPCG Licence and therefore Notification No.49/2000 dt. 27.4.2000 cannot be denied to the appellants - the EPCG Licence covered the goods and there was no bar on importing the individual components in different bill of entries so long as the total number of sets imported is within the limit prescribed in the EPCG licence - duty demand set aside. Confiscation - misdeclaration of the quantity of goods imported - Held that - the quantity declared in the bill of entry is less than the actual quantity imported and Section 111(l) has rightly invoked. Further it is seen that the quantity and value declared in the bill of entry does not match with the actual quantity found and the consignment thus Section 111(m) has also rightly been invoked. Imposition of redemption fine - Held that - the redemption fine in respect of imports made vide bill of entry No. 3054 is revised to ₹ 3 lakhs only. In respect of imports made vide bill of entry No. 2658 redemption fine of ₹ 2lakhs has been imposed, the same is upheld. Imposition of penalty - Held that - there was a error in the bill of entry No. 3054 when the same was filed before Customs on 17.6.2002 still no efforts were made to correct the declaration. Infact the subsequent bill of entry was also filed that wrong details. In these circumstances, the penalty of ₹ 1 lakh imposed u/s 112(a) is reasonable. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues Involved:
1. Denial of EPCG Licence benefits.
2. Confiscation of goods under Section 111(m) and 111(l) of the Customs Act, 1962.
3. Imposition of penalties under Section 112(a) of the Customs Act, 1962.

Issue-Wise Detailed Analysis:

1. Denial of EPCG Licence Benefits:
The main appellant, M/s. Wockhardt Ltd., obtained an EPCG Licence for importing "Magnetic Mixers/agitators with mixing head, drive unit and accessories." The licence was amended to cover 34 sets and six sets in SKD condition. However, discrepancies were found between the quantities mentioned in the invoices and those actually shipped. The appellant argued that the EPCG licence covered the entire goods imported and that there was no requirement to import complete sets at once. The Tribunal found that the total quantity imported was within the limits prescribed by the EPCG Licence and that there was no restriction on importing individual components in different consignments. Thus, the denial of the benefit of Notification No. 49/2000 was found to be unwarranted, and the duty demand was set aside.

2. Confiscation of Goods Under Section 111(m) and 111(l) of the Customs Act, 1962:
The show cause notice sought to confiscate goods imported under Bills of Entry No. 429, 3054, 2658, and 218, alleging discrepancies in the declared and actual quantities. The Tribunal upheld the confiscation of goods imported under Bills of Entry No. 3054 and 2658, as there were clear discrepancies in the quantities and values declared versus those actually imported. In the case of Bill of Entry No. 3054, the quantity declared was 2 sets, but the actual quantity imported was 5 sets and additional components, leading to the invocation of Sections 111(l) and 111(m). Similarly, for Bill of Entry No. 2658, the declared quantity did not match the actual quantity imported, justifying the invocation of Section 111(m). However, the confiscation of goods under Bills of Entry No. 429 and 218 was set aside as the declared quantities and values matched the actual imports.

3. Imposition of Penalties Under Section 112(a) of the Customs Act, 1962:
Penalties were imposed on M/s. Wockhardt Ltd., Shri Anil Sharma, and M/s. Zulash Clearing & Shipping Agency for failing to present correct invoices and for not informing the customs authorities about the discrepancies. The Tribunal found that Shri Anil Sharma was aware of the errors in the invoices but did not take corrective measures. Consequently, the penalty of ?1 lakh imposed on him was upheld. Similarly, M/s. Zulash Clearing & Shipping Agency was aware of the discrepancies but did not inform the customs authorities, justifying the penalty of ?50,000. The penalty of ?1 lakh on M/s. Wockhardt Ltd. was also upheld. However, the overall appeal of M/s. Wockhardt Ltd. was partly allowed, while the appeals of Shri Anil Sharma and M/s. Zulash Clearing & Shipping Agency were dismissed.

Conclusion:
The Tribunal concluded by setting aside the duty demand and the confiscation of goods under Bills of Entry No. 429 and 218. The confiscation and penalties related to Bills of Entry No. 3054 and 2658 were upheld, with revisions to the redemption fines. The penalties imposed on Shri Anil Sharma and M/s. Zulash Clearing & Shipping Agency were also upheld, while the appeal of M/s. Wockhardt Ltd. was partly allowed.