2017 (5) TMI 1230 - AT - Customs

Benefit of DFCEC scheme - PSU unit - misdeclaration of goods - appellant claims that since they came to know about the mistake due to non-receipt of other invoices they reported it to the Revenue vide letter dated 31/10/2007 - Held that - the appellants are a Public Sector Undertakings and in the facts of the case no clear cut suppression or mis-declaration with intention to evade duty is established - the appellant had claimed benefit of DFCEC scheme, but both the lower authorities have failed to consider this claim of the appellant though the same has been recorded in order-in-original. In the absence of any hard evidence to support mis-declaration with intention, I am inclined to be lenient. The redemption fine is reduced to ₹ 5,000/- and the penalty on Indian Airlines is reduced to ₹ 1,000/- only - appeal allowed - decided partly in favor of appellant.

Summary

Issues:
Appeal against demand of duty, penalty, and redemption fine due to non-declaration of excess goods in import documents. Failure to receive all invoices from the supplier causing a clerical error. Claim of benefit under DFCEC scheme not considered by lower authorities. Confiscation of goods and imposition of penalty disputed.

Analysis:
The appeal was filed by M/s. Indian Airlines contesting the demand of duty, penalty, and redemption fine resulting from the non-declaration of excess goods in their import documents. The Assistant General Manager argued that the error occurred due to the non-receipt of another invoice from the supplier, which led to the failure to declare the excess goods during import document filing. He emphasized that it was a clerical mistake and not intentional mis-declaration. The argument highlighted the lack of incentives for mis-declaration, especially given Indian Airlines' status as a public sector undertaking. The appellant also mentioned seeking a transfer of the bill of entry under the DFCEC scheme, a claim not addressed by the original adjudicating authority and the first appellate authority.

The Revenue countered by stating that the excess goods were only detected upon examination, and the appellant's explanation regarding the missing invoice was presented after the fact. They disputed the validity of the appellant's notification regarding the missing invoice, as it was not specifically addressed to any Customs official. Notably, the examination of goods coincided with the date of the notification. Despite the lack of concrete evidence supporting intentional mis-declaration, the Revenue argued for confiscation of goods and imposition of penalties.

The Tribunal considered the arguments from both sides and acknowledged the appellant's claim of bonafide error resulting from miscommunication with their suppliers. Given the circumstances and the appellant being a Public Sector Undertaking, the Tribunal found no clear evidence of intentional evasion of duty. However, it noted that Section 111 does not require proof of intent to evade duty for goods to be liable for confiscation and importers for penalties. The Tribunal also highlighted the failure of the lower authorities to consider the appellant's claim under the DFCEC scheme, leading to a remand for fresh adjudication.

In the absence of substantial evidence supporting intentional mis-declaration, the Tribunal opted for leniency. The redemption fine was reduced to ?5,000, and the penalty imposed on Indian Airlines was reduced to ?1,000. The judgment emphasized the importance of considering all relevant claims and circumstances in duty-related cases to ensure fair adjudication.