2017 (6) TMI 884 - AT - Customs

Misdeclaration of quantity of imported goods - confiscation - redemption fine - penalty - whether the lower authority is correct in confiscating the goods which were not declared while filing the Bill of Entry and consequent penalties are correct or otherwise? - Held that - there is no dispute that there is mis-declaration of the goods contained in the consignment; is in itself a valid reason to hold that excess found goods are liable to be confiscated under the provisions of Section 111 of Customs Act, 1962 - the mis-declared quantity and value of goods is correctly confiscated, and appellants contention that error of as mis-declaration was a genuine mistake due to fault of supplier is unacceptable and the proposition is rejected. Both redemption fine and penalty needs to be in proportion of the value of undeclared goods. In my considered view, ends of justice will be met if the redemption fine imposed by the lower authorities is reduced to ₹ 2 lakh and consequent penalties imposed is reduced to ₹ 50,000/- under Section 112(b)(ii) and ₹ 1 lakh under Section 114AA of the Customs Act, 1962 Appeal allowed - decided partly in favor of appellant.

Summary

Issues:
1. Confiscation of goods not declared in Bill of Entry.
2. Imposition of penalties under Sections 112(b)(ii) and 114AA of the Customs Act, 1962.

Confiscation of Goods Not Declared:
The case involved an appeal against the confiscation of goods due to a discrepancy in the number of packages declared in the Bill of Entry and the actual number found during examination. The appellant contended that the discrepancy was due to a technical issue at the supplier's end, resulting in one invoice not being issued for excess packages. The appellant argued for re-assessment without a show cause notice, citing Section 17(4) of the Customs Act, 1962. The appellant relied on the Customs Appraising Manual and a judgment of the High Court of Madras to support the release of non-offending goods. However, the tribunal held that the mis-declaration of goods was valid grounds for confiscation under Section 111 of the Customs Act. The tribunal rejected the appellant's argument that the error was due to the supplier's fault, emphasizing that only offending goods can be confiscated. The tribunal reduced the redemption fine and penalties in proportion to the value of the undeclared goods, concluding that justice would be served by reducing the fines.

Imposition of Penalties:
The tribunal considered the penalties imposed under Sections 112(b)(ii) and 114AA of the Customs Act, 1962. The appellant argued that since the non-declaration of packages was the supplier's mistake, no malafide intent could be attributed to the appellant. The departmental representative reiterated the lower authorities' findings of mis-declaration. The tribunal held that the penalties should be proportionate to the value of the undeclared goods. Consequently, the tribunal reduced the penalties imposed under Sections 112(b)(ii) and 114AA to &8377; 50,000 and &8377; 1 lakh respectively, aligning them with the value of the undeclared goods. The tribunal disposed of the appeal by ordering the reduction of fines and penalties in line with the value of the non-declared goods.

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