2017 (9) TMI 1089 - AT - Customs

Scope of SCN - mis-declaration of goods - DEPB benefit - Held that - the question of DEPB benefit is not the subject matter of the present appeal inasmuch as the same has been left for the DGFT authority to decide, even by the original adjudicating authority. It is well settled that the claim of wrong entry or a benefit, which is not available to the assessee, cannot be considered to be a mis- description on a mala-fide. The appellant have claimed the entry, and it was for the Revenue to adjudge the assessee s claim. The benefit was claimed by the assessee, according to his knowledge and belief and by making a clear representation to the Revenue. If the customs were of the opinion that such benefit is not available to the assesse, they were within their powers and jurisdiction to examine the same and to deny it. Similarly, a claim made by the assessee, which have not been found favour with by the Revenue, cannot be adopted as a ground to penalise the assessee. Appeal dismissed - decided against Revenue.

Summary

Issues:
Mis-declaration of DEPB Serial Number, Confiscation of goods, Imposition of penalty, Interpretation of Foreign Trade Policy rules.

Analysis:
The case involved the mis-declaration of the DEPB Serial Number by the exporter for claiming benefits. Out of 20 shipping bills, 15 were allowed for export under the DEPB claim, while 5 were disputed due to the incorrect Serial Number. The original adjudicating authority disallowed the DEPB benefit for the 5 bills and initiated proceedings for confiscation of goods and penalty imposition. The Commissioner (Appeals) set aside the redemption fine and penalty, citing the exporter's obligation to declare goods accurately under the Foreign Trade Rules.

The Commissioner (Appeals) highlighted that the mis-declaration of the DEPB Serial Number did not automatically warrant penal action, especially when the goods' description and value were accurately declared. Citing legal precedents, the Commissioner (Appeals) emphasized that incorrect classification or claim of exemption does not constitute mis-declaration under relevant sections. The judgment referred to previous cases to support the view that a wrong DEPB entry does not amount to mis-declaration under Section 113(i), thereby rejecting the confiscation of goods and penalty imposition.

The Revenue appealed the decision, arguing that the confiscation of goods and penalty should not have been set aside. However, the Appellate Tribunal upheld the Commissioner (Appeals) decision, emphasizing that the exporter's claim was made in good faith, and any disagreement on the benefit's availability should not lead to penalizing the exporter. The Tribunal concluded that the Revenue lacked grounds to penalize the exporter for a claim that was made based on the exporter's understanding and representation, ultimately rejecting the Revenue's appeal.

In conclusion, the judgment focused on the accurate declaration of goods under the Foreign Trade Rules and clarified that a disputed claim for benefits, based on the exporter's belief, should not result in confiscation of goods or penalty imposition. The decision underscored the importance of assessing claims in good faith and within the framework of relevant regulations, ultimately upholding the Commissioner (Appeals) ruling and rejecting the Revenue's appeal.