2017 (8) TMI 142 - AT - Customs

Mis-declaration of goods - import of of CDRs by misdeclaring as DVDRs - it was alleged that the goods were mis-declared to avoid payment of Anti Dumping Duty - Section 111 of the Customs Act - Held that - On plain reading of Section 111 (m), it is clear that any imported goods which do not correspond to any particular Bill of Entry shall be liable for confiscation. In the present case, undisputedly, there is mis-declaration of goods with the Bill of Entry and therefore, the confiscation would be followed. There are twin Sections, Section 112 and Section 114, to impose penalty for improper import of goods and penalty for attempt to export goods improperly, respectively. Apart from that, Section 114 AA would be invoked in a situation where a person knowingly had given a false declaration. The expression where no express penalty is elsewhere provided for such contravention , in Section 117 makes it clear that it is a penalty of residuary nature - In the present case, the facts narrated in the Show-cause notice would show that M/s Santosh Radio Products and its Partner Shri Kishan Kumar Kejriwal had knowingly made incorrect declaration, which is covered under Section 114 (AA) of the Act. Penalty on M/s Santosh Sales Pvt. Ltd. and its Managing Director u/s 117 - Held that - the imposition of penalty on the person for merely purchasing and selling of the goods, is excessive. And therefore, the penalty imposed on them is unjustified. Appeal allowed - decided partly in favor of appellant.

Summary

Issues:
Misdeclaration of goods as DVDRs, confiscation under Sections 111 (m) and 119 of the Customs Act, 1962, imposition of penalties under Sections 112(a), 112(b), 114AA, and 117 of the Act.

Analysis:

Misdeclaration of Goods:
The appellants imported CDRs misdeclared as DVDRs to avoid Anti Dumping Duty, as admitted by them. The misdeclaration led to confiscation under Section 111 (m) of the Act, as per the judgment. The Tribunal cited precedents where misdeclaration to evade duty rendered goods liable for confiscation and penalties.

Confiscation under Section 111 (m):
The Tribunal upheld the confiscation of 14,04,000 pcs. of CDRs misdeclared as DVDRs under Section 111 (m) due to the clear misdeclaration in the Bill of Entry. The judgment emphasized that any imported goods not corresponding with the entry made are liable for confiscation under this section.

Confiscation under Section 119:
Regarding the confiscation of 7,56,000 pcs. of DVDRs under Section 119 for concealment, the Tribunal disagreed. It noted that the separate packing of DVDRs did not constitute concealment, as they were not used to hide the misdeclared goods. Precedents were cited to distinguish between concealment and covering of goods.

Penalties Imposed:
The judgment discussed penalties under Sections 112, 114AA, and 117 of the Act. It highlighted that Section 114AA applies when false declarations are knowingly made, justifying penalties on M/s Santosh Radio Products and its partner. However, the penalty on the partner was set aside as it was imposed on the partnership firm. The penalty on M/s Santosh Sales Pvt. Ltd. and its Managing Director under Section 117 was deemed excessive and unjustified, leading to it being set aside.

Legal Interpretation:
The Tribunal clarified the application of penalty provisions under Sections 112, 114AA, and 117, emphasizing the specific situations where each section is invoked. It cited relevant case laws to support its decision and highlighted the importance of correct application of penalty provisions in customs cases.

Final Decision:
In conclusion, the Tribunal upheld the confiscation of misdeclared CDRs under Section 111 (m), set aside the confiscation of DVDRs under Section 119, and modified the redemption fine. Penalties were upheld for M/s Santosh Radio Products, but set aside for the partner and M/s Santosh Sales Pvt. Ltd. and its Managing Director. The judgment provided a detailed analysis of each issue and legal provision, ensuring a fair and comprehensive decision.

This detailed analysis of the judgment highlights the key issues of misdeclaration, confiscation, and imposition of penalties under various sections of the Customs Act, providing a thorough understanding of the legal reasoning and decision-making process involved in the case.