2017 (7) TMI 150 - AT - Customs

Natural justice - misdeclaration of goods - The importer has questioned the propriety of ordering confiscation of goods once these had been abandoned as abandonment implied relinquishing of ownership of the goods with no further right to those goods - penalty - Held that - the impugned order has not recorded a disposal of the request of the importer for re-test of the samples. Unless the test report is able to confirm that the goods have been misdeclared, the entire proceedings, based as they are on the allegation of attempt to evade the stipulation of floor prices imposed as a condition of import, would fail. The credibility of the test report has to be established beyond doubt. The consequence of abandonment of goods has also not been examined in the impugned order - there is need for a re-consideration of the submissions made by the importer - appeal allowed by way of remand.

Issues:
1. Failure to confiscate goods provisionally released on bond and security deposit.
2. Alleged mis-declaration by the importer to evade floor price on imported goods.
3. Challenge against imposition of penalty based on expired notifications.
4. Allegation of misdeclaration by the importer to evade minimum floor price.
5. Questioning the propriety of ordering confiscation of abandoned goods.
6. Request for re-test of samples and credibility of the test report.
7. Examination of consequences of goods abandonment in legal proceedings.

Analysis:
1. The judgment involves five appeals, including one by Revenue challenging the failure to confiscate goods provisionally released on bond. The importer and the director of the importing company challenge the same order on mis-declaration grounds. The dispute pertains to imports under specific bill of entry numbers and identical facts across other consignments.

2. The importer is accused of mis-declaration to evade the floor price on imported goods. The Tribunal remanded the case to ensure compliance with natural justice principles. During the remand, the importer abandoned the goods under Customs control, leading to a penalty imposition challenge by the importer and director.

3. The importer argues that the notifications used against them had expired due to a 'self-destruct clause.' They contend that the adjudication wrongly invoked these notifications for penalty imposition. Legal precedents, including Kolhapur Cane Sugar Co Ltd v. Union of India and Ajay Industrial Corporation v. Commissioner of Customs, are cited to support the argument that the notifications were no longer valid.

4. The judgment confirms the importer's misdeclaration with intent to evade the minimum floor price restriction. The importer challenges the reliance on the test report, claiming their request for re-testing was denied. They argue that misdeclaration of quantity is irrelevant for ad valorem duty calculation.

5. The importer questions the confiscation of abandoned goods, asserting that relinquishing ownership vests the goods with the government, halting further proceedings.

6. The court notes the lack of disposal of the importer's re-test request and emphasizes the need to establish the credibility of the test report to validate the misdeclaration allegations. The consequences of goods abandonment are also highlighted as crucial aspects requiring examination.

7. Due to the critical nature of re-testing and goods abandonment consequences on the case's outcome, the judgment sets aside the impugned orders and remands the matter to the original authority for a fresh decision after considering the importer's submissions.

This detailed analysis covers the issues raised in the judgment comprehensively, addressing the legal arguments, challenges, and procedural aspects involved in the case.

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