2017 (11) TMI 48 - AT - Customs

Short payment of duty - Data Tapes - whether there is any short collection of duty arises as per the show cause notice? - Held that - the importer has deliberately not disclosed the Data Tapes in the IGM and only after recording of the data in India, he had sought to clear them as imported goods and also obtained the Essentiality Certificate from the Directorate General of Hydrocarbons on the same pretext. During the period of its import, the pre-recorded Data Tapes were classifiable under CETH 8523 and the Recorded Data Tapes were classifiable under CETH 8524. Data Tapes cannot be considered as Stores in relation to the present consignment and also that the importer should have obtained the Essentiality Certificates if they intend to avail the duty exemption under Sl. No. 217 of CN. 21/2002 (as amended by CN. 26/2003) at the time of import of these goods into the country - impugned order upheld. Whether the 155 boxes of Data Tapes on which seismic activity is recorded are liable for confiscation or otherwise? - Held that - seismic data tapes unrecorded at the time of original import their classification was appropriate under 852390, hence in our view adjudicating authority classification of product cannot be faulted, holding the data tapes are required for seismic activity particular place, accordingly it is to be held on used in a vessel hence has to be considered as ship stores in terms of Section 2(38) of the Customs Act, 1962 - impugned order upheld. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Short collection of duty arising from a show cause notice.
2. Confiscation of 155 boxes of Data Tapes and liability of individuals under Section 112(a) of the Customs Act, 1962.

Analysis:
1. The appeal was filed by the Revenue against the Order-in-Original regarding the short collection of duty. The main issue was whether the Data Tapes imported and retained without payment of duty were liable for confiscation. The respondent imported Data Tapes along with a seismic survey vessel, recorded seismic data on them, and later attempted to clear them through Mumbai port with duty exemption certificates. The Customs authorities found discrepancies in the import process, leading to the seizure of the Data Tapes. The adjudicating authority concluded that the Data Tapes were not entitled to duty exemption as they were not declared properly, and the importer failed to obtain Essentiality Certificates at the time of import, resulting in misdeclaration and duty liability.

2. The second issue revolved around the confiscation of the 155 boxes of Data Tapes. The adjudicating authority determined that the importer engaged in misdeclaration by not declaring the Data Tapes properly in the Import General Manifest and Bill of Entry. Despite being released provisionally during the investigation, the goods were found to be liable for confiscation under Section 111(m) and 111(j) of the Customs Act, 1962. The authority cited a Supreme Court judgment to support the imposition of redemption fine in cases of irregularities with provisionally released goods. The Tribunal upheld this decision, emphasizing that the Data Tapes were not correctly classified as Ship Stores and were liable for confiscation due to misdeclaration.

3. The Tribunal's analysis focused on the proper classification of the Data Tapes for seismic activity purposes. Referring to a previous judgment, it was established that the Data Tapes were essential for seismic operations and could be considered as ship stores under the Customs Act. The Tribunal agreed with the adjudicating authority's classification of the Data Tapes and upheld the decision that they were not entitled to duty exemption. The judgment highlighted the importance of accurate declaration and compliance with duty requirements for imported goods.

In conclusion, the Tribunal affirmed the correctness and legality of the impugned order, rejecting the Revenue's appeal. The judgment emphasized the necessity of proper declaration, compliance with duty regulations, and the consequences of misdeclaration in import processes.