2017 (3) TMI 539 - AT - Customs

Penalty u/s 112(a) of the CA, 1962 - in the Bill of Entry filed by the importer, the goods have been misdeclared - The importer filed Bill of Entry declaring various types of Screws as well as Cotton Gloves as imported goods. On an open examination of the goods, it was found that Cotton Gloves were received. However, in place of various types of Screws, steel measuring tapes were found - Held that - the measuring tapes, which have not been declared but were found in the consignment become prohibited goods and liable for confiscation u/s 111(d), (n) (m) of the CA, 1962. The goods stand absolutely confiscated without giving an option for redemption - The importer seems to have accepted this and forfeited this consignment. - However for the offence of misdeclaration, the importer will be liable for penalty u/s 112(a) of the CA, 1962. Cotton Gloves for industrial use, have been confiscated u/s 119 by taking a view that these were used to conceal the smuggled goods viz. the steel measuring tapes - this view is farfetched. The cotton gloves for industrial use were declared in the Bill of Entry and hence there is no justification for ordering confiscation of this item - penalty also set aside. Appeal disposed off - decided partly in favor of importer.

Summary

Issues: Misdeclaration of imported goods, confiscation of goods, imposition of penalty under Customs Act.

Analysis:

The appeal was filed by the Revenue against the Order-in-Appeal dated 28.02.2014, where the Commissioner (Appeals) upheld the absolute confiscation of steel measuring tapes but vacated the penalty imposed on the importer. The misdeclaration of goods, specifically the import of steel measuring tapes instead of screws as declared, led to the confiscation of the undeclared goods and the imposition of a penalty of &8377; 10 Lakh under sections 111(l), (d), and (m) of the Customs Act, 1962. The declared goods, cotton gloves, were also confiscated under section 119 but allowed for redemption with a fine of &8377; 2 Lakh. The Revenue contended that the confiscation and penalties should not have been set aside by the Commissioner (Appeals) and sought the imposition of penalty under section 114A on the importer.

During the proceedings, it was established that the importer had indeed misdeclared the goods by declaring screws but importing steel measuring tapes. The steel measuring tapes, being undeclared prohibited goods, were liable for absolute confiscation under sections 111(d), (n), and (m) of the Customs Act, 1962. The importer's argument that the received goods were not those ordered did not absolve them of the misdeclaration in the Bill of Entry. Therefore, the confiscation of the measuring tapes and the imposition of a penalty under section 112(a) of the Customs Act, 1962, were deemed appropriate.

Regarding the cotton gloves declared for industrial use, they were found as per the declaration in the consignment. The Tribunal disagreed with the view that these gloves were used to conceal the smuggled steel measuring tapes, deeming it farfetched. As the cotton gloves were declared in the Bill of Entry, there was no justification for their confiscation. Additionally, there was no basis for imposing a penalty under Section 114A for this item. Consequently, the Tribunal imposed a penalty of &8377; 2,00,000 on the importer under section 112(a) of the Customs Act, 1962.

In conclusion, the appeal was disposed of with the imposition of the penalty on the importer under section 112(a) of the Customs Act, 1962, while upholding the confiscation of the steel measuring tapes and rejecting the confiscation and penalty on the cotton gloves.