2018 (3) TMI 647 - AT - Customs

Misdeclaration of imported goods - whether under the admitted facts that the appellant imported 7140 numbers of polyester blanket vide bill of entry dated 12th August, 2015 at ICD, Sonepat, as per the bill of entry, the appellant declared the goods as polyester blankets supported by bill of lading No. YSBNF1506503 dated 6th July, 2015 supported by invoice, in container No.DFSU 7736018-40? Held that - it is an admitted fact that the undeclared goods are very small quantity or by way of sample or by way of gift sent by the foreign supplier in the said container. That appears to be a small item by way of sample or goods in the invoice or bill of lading or another connected documents. Further, it is also admitted fact that these goods are very small in value, less than 5% of the value of the declared goods - it is not the case made out by the Revenue that the appellant have made windfall by importing item found undeclared in the facts of the present case. Absolute confiscation of undeclared goods upheld - quantum of penalty reduced - appeal allowed in part.

Summary

Issues:
1. Confiscation of imported goods due to undeclared items found in the consignment.
2. Imposition of penalty on the importer.
3. Appeal against the order-in-original and rejection by the Commissioner (Appeals).

Issue 1: The main issue in this appeal was whether the imported consignment of polyester blankets, declared by the appellant, could be confiscated due to the presence of undeclared goods, specifically BT-Led Light Bulb Speakers and handbags. The appellant claimed they did not order these undeclared items and were unaware of their presence in the container. The Customs Officer found the undeclared goods during re-examination, leading to the confiscation of the handbags and the imposition of a penalty on the importer.

Issue 2: The order-in-original dated 6th October 2015 directed the confiscation of the declared blankets valued at ?20,33,073, with an option to redeem them on payment of a fine of ?3 lakhs. Additionally, 70 handbags were ordered to be absolutely confiscated, and a penalty of ?1 lakh was imposed on the importer. The Commissioner (Appeals) upheld these findings, resulting in the appellant filing an appeal before the Tribunal.

Issue 3: The appellant appealed to the Tribunal, arguing that they did not order the undeclared items and that these goods were sent as free samples by the supplier. The appellant contended that the value of the undeclared goods was insignificant compared to the declared goods and that there was no intention to deceive or make a profit from the undeclared items. The Tribunal, after considering the arguments from both sides, found that the undeclared goods were of nominal value and did not lead to a windfall profit for the appellant. Consequently, the order of confiscation of the blankets was set aside, while the absolute confiscation of the undeclared goods was upheld. The penalty imposed on the appellant was reduced to ?5,000 under relevant sections of the Customs Act, 1962.

In conclusion, the Tribunal allowed the appeal in part, providing the appellant with consequential benefits as per the law.