2007 (11) TMI 99 - AT - Customs

Once fresh DFRC license has been produced to cover the excess quantity of imported goods, contravention of sec. 111(d) no longer exists hence no mis-declaration is there goods not liable to confiscation or penalty

Summary

Issues:
1. Confiscation of goods under Customs Act for excess quantity.
2. Imposition of penalty on importers and Directors.
3. Adjudication of penalty against Customs House Agent (CHA).
4. Appeal against the order of confiscation and penalty.
5. Consideration of fresh DFRC license to cover excess quantity.

Analysis:
The case involved the filing of Bills of Entry for clearance of Polyester Woven Fabric under the DFRC scheme, where the goods were found in excess of the declared quantity. A show cause notice was issued proposing confiscation of goods, re-assessment of duty, and imposition of penalties under relevant provisions of the Customs Act. The Commissioner initially confiscated the goods with an option for redemption on payment of a fine. The benefit of DFRC was restricted to the declared quantity, and a penalty was imposed on the importers. The matter was appealed to the Tribunal, which remanded the case for fresh decision upon the production of a transferable DFRC license to cover the excess quantity.

Upon re-adjudication, the Commissioner allowed the importers to avail the benefit of the fresh DFRC license for the excess quantity but ordered confiscation of goods with a fine and imposed penalties on the importers. The appellants contended that once a fresh DFRC license was produced to cover the excess quantity, the contravention of the Customs Act no longer existed, and therefore, the goods should not be liable for confiscation. The Commissioner had already cautioned the importers against future mis-declarations.

In consideration of the above arguments, the Vice-President of the Tribunal set aside the confiscation and penalties imposed, thereby allowing the appeal. The decision was based on the premise that with the production of a valid DFRC license covering the excess quantity, the contravention ceased to exist, warranting the reversal of the confiscation and penalties.