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2017 (5) TMI 1370 - AT - CustomsClassification of exported goods - placemats, napkins and runners of composition 60%/70% silk and balance cotton - classified under heading 57025920 of the Customs Tariff, which covers carpet and other floor coverings of silk or otherwise? - Benefit of DEPB scheme - The appellant sought benefit of DEPB under DEPB group code 89 Sr.No.47C which entitles credit of DEPB @ 4.7% of the FOB value - Held that - the shipping bill has the description of 70% silk and 30% cotton or 60% or 60% silk and 40% cotton. It is obviously a product, which is not covered by the description provided under DEPB entry 89/47C which reads Made-ups made out of one or more manmade filament yarn with or without metalized yarn . - it is likely that it was a clerical error on the part of the exporter. None the less there has been a violation of Section 113 (i) of the CA, in so far as wrong DEPB entry was claimed. The redemption fine is reduced from ₹ 20 lakhs to ₹ 2 lakh and penalty is reduced from ₹ 1 lakh to ₹ 10,000/- only - appeal allowed - decided partly in favor of appellant.
Issues: Appeal against confiscation of goods, imposition of redemption fine, and penalty in respect of exported goods.
Analysis: 1. Confiscation of Goods: The appellant, M/s. Ganpati Exports, filed an appeal against the confiscation of goods, redemption fine, and penalty imposed on goods exported by them. The goods in question were placemats, napkins, and runners made of a composition of silk and cotton. The appellant classified the goods under a specific Customs Tariff heading, claiming DEPB benefit under a particular group code. However, upon testing by the DY CC, it was found that the composition of the goods differed from what was declared by the appellant. The discrepancy led to the allegation that the appellant had erroneously claimed DEPB benefit under the wrong entry, which was considered a violation of the Customs Act. 2. Argument and Counter-Argument: The appellant's counsel argued that the discrepancy in composition was a typographical error, and there was no intention to mis-declare. It was contended that the composition declared by the appellant was different from what was found in the test report due to the omission of considering the border of the runners, which was entirely made of silk. The appellant maintained that the goods were described in the shipping bill as fabrics consisting of the declared silk and cotton composition. On the other hand, the learned AR relied on the impugned order, emphasizing the discrepancy between the declared composition and the actual composition found in the test report. 3. Judgment: Upon considering the rival submissions, the Tribunal found that the goods did not fall under the description provided in the DEPB entry claimed by the appellant. It was noted that there was a clerical error on the part of the exporter, leading to the wrong DEPB entry claim. Despite acknowledging the error, the Tribunal reduced the redemption fine and penalty imposed on the appellant. The redemption fine was reduced from ?20 lakhs to ?2 lakhs, and the penalty was reduced from ?1 lakh to ?10,000. The appeal was partly allowed based on these terms. In conclusion, the judgment addressed the issues of confiscation of goods, redemption fine, and penalty in the context of erroneous DEPB benefit claim due to a clerical error by the exporter. The reduction in fines and penalties indicates a consideration of the circumstances while upholding the violation of the Customs Act.
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