2017 (10) TMI 299 - AT - Customs

Mis-declaration of goods - Revenue alleged that the goods contained serviceable wheels - Revenue says that the end-use certificate obtained by appellants is not the basis to hold that appellant had imported scraps when such certificate does not disclose description of the scrap - Held that - It is well settled that post-importation condition is immaterial for the purpose of classification - in the present case, when physical examination of the goods was done, that revealed that alloy wheels were in the consignment. When mis-declaration is made by importer deliberately and that is proved resulting in confiscation of goods, appellant looses its right to plead innocence. It was given opportunity of redemption, valuing the confiscated goods following Rule of Rationale. Right to claim any reduction in redemption fine and penalty is lost by appellant. Appeal allowed in part.

Summary

Issues involved: Mis-declaration of goods, enhancement of value, redemption fine, penalty imposition, relevance of certificate, post-importation condition, classification, physical examination, bonafide import, confiscation, redemption option, valuation of confiscated goods, reduction in redemption fine, apex court ratio, personal penalty imposition.

In this judgment by the Appellate Tribunal CESTAT MUMBAI, the main issue revolved around the mis-declaration of goods by the appellants. The Revenue alleged that the goods contained serviceable wheels, leading to an enhancement of the value, imposition of a redemption fine, and penalties on both appellants. The appellants argued that there was no mis-declaration and presented a certificate issued by excise authorities when the scraps were melted as evidence. They relied on a previous case where a similar contention was accepted by the Tribunal. However, the Revenue contended that the end-use certificate obtained by the appellants was not sufficient to prove the absence of imported serviceable wheels.

The Tribunal emphasized that the post-importation condition is immaterial for classification purposes. While the appellant's bonafide intent was acknowledged in a previous case, in this instance, a physical examination revealed alloy wheels in the consignment. The description in the bill of entry was split into two parts to defend the case, but it was confirmed that the imported consignment did contain serviceable wheels as found during physical examination. The certificate produced by the appellant post-importation was deemed irrelevant to the law. The Tribunal highlighted that when mis-declared goods are found, they are liable to confiscation, and an option for redemption is provided. The appellant's right to claim reduction in redemption fine and penalty was forfeited due to deliberate mis-declaration.

Considering the facts and value of mis-declared goods, the Tribunal reduced the redemption fine to ?8 lakhs following a ratio laid down by the apex court in a previous case. The penalty imposed on the appellant-company was confirmed due to proven mis-declaration. However, a lesser personal penalty of ?2 lakhs was imposed on one of the appellants to prevent recurrence of mis-declaration. Ultimately, both appeals were partly allowed based on the indicated adjustments.