2018 (1) TMI 1059 - AT - Customs

Redemption fine - penalty - mis-description of imported goods - Heavy Melting scrap - Held that - there is clear mis-declaration of description of goods and hence the original authority confiscated the goods under Section 111 (m) of the Customs Act, 1962 - appellant has suffered huge detention/demurrage charges which is also a mitigating factor while considering the quantum of redemption fine and penalty applicable in such circumstances. we therefore reduce the redemption fine to ₹ 1,00,000/- and penalty to ₹ 50,000/-, without disturbing the re-determined value of the imported goods - appeal allowed in part.

Summary

Issues: Mis-declaration of goods, re-determination of value, redemption fine, penalty

Mis-declaration of goods:
The case involved a situation where the description of the goods in the Bill of Lading differed from the actual contents of the consignment. The appellants had ordered Heavy Melting Scrap, but the Bill of Lading indicated Secondary Defective MS Pipes. The customs officers found Alloy Steel Pipes and Channels Seconds in the consignment. The Original Authority re-determined the value and duty payable based on the actual contents of the consignment, leading to a demand for differential duty, redemption fine, and penalty.

Re-determination of value:
The Original Authority confirmed the re-determination of value and duty payable, considering the actual contents of the consignment as Alloy Steel Pipes and Channels Seconds. The value was re-fixed by a Chartered Engineer at US$ 75,000, significantly higher than the originally declared value of US$ 37,728. The appellants did not contest the re-determination of value or the demand for differential duty but challenged the redemption fine and penalties imposed.

Redemption fine and penalty:
The appellants argued that they were not at fault for the mis-declaration, attributing it to the suppliers. They also highlighted the significant demurrage and detention charges incurred during the customs process. The appellants sought a reduction in the redemption fine and penalty, considering the losses suffered due to the delays and charges incurred. The Revenue, however, contended that mis-declaration warranted the imposition of penalties under the Customs Act, and the demurrage charges could not justify leniency in reducing the fines and penalties.

Judgment:
After hearing both sides and reviewing the case records, the Tribunal acknowledged the mis-declaration of goods and the re-determination of value. While upholding the re-determined value and differential duty demand, the Tribunal considered the appellants' argument regarding the demurrage and detention charges incurred. Consequently, the Tribunal reduced the redemption fine from &8377; 3,00,000 to &8377; 1,00,000 and the penalty from &8377; 2,00,000 to &8377; 50,000. The Tribunal modified the original order by reducing only the redemption fine and penalty, maintaining the re-determined value of the imported goods. The appeal was partly allowed based on the reduction in fines and penalties, taking into account the mitigating factor of incurred charges.