2018 (4) TMI 1196 - AT - Customs

Redemption fine - penalty - duty drawback - it was alleged that exporter had declared excess weight of the said items - Held that - there are no grounds to set aside the redemption fine and penalty entirely - misdeclaration of value as well as the weight of the garments happened only because of the wrong advice given by the customs broker - the redemption fine and penalty is to be reduced - appeal allowed in part.

Summary

Issues:
1. Incorrect declaration of value and weight in shipping bills leading to excessive drawback claim.
2. Imposition of redemption fine and penalties by the Original Authority.
3. Appeal against the reduction of fine and penalty before the Tribunal.

Analysis:
1. The appellants filed shipping bills declaring the total FOB value for certain items and claiming drawback. However, upon examination, it was revealed that the exporter had declared excess weight and overvalued certain items to claim higher drawback. This led to the issuance of a Show Cause Notice (SCN) by the Original Authority, raising allegations of incorrect declarations and imposition of redemption fine and penalties.

2. The Original Authority confirmed the proposals in the SCN, confiscating the goods and imposing redemption fine and penalties. On appeal, the Commissioner (Appeals) reduced the redemption fine but upheld the penalty under section 114 of the Customs Act, 1962. The appellants further appealed to the Tribunal, challenging the reduced fine and penalty.

3. During the Tribunal hearing, the appellant's consultant argued that the incorrect declarations were due to wrong advice from the customs broker, with no intention to defraud revenue. The appellant suffered business losses due to the confiscation of goods, requesting a lenient view. The Assistant Commissioner (AR) reiterated the findings in the Impugned Order.

4. After hearing both sides, the Tribunal acknowledged the misdeclaration of value and weight but noted the influence of the customs broker's advice. While not entirely setting aside the redemption fine and penalty, the Tribunal decided to reduce them based on the circumstances. Consequently, the redemption fine was reduced to &8377; 1,50,000 and the penalty to &8377; 75,000, modifying the Impugned Order accordingly.

5. The Tribunal's decision to partially allow the appeal resulted in the modification of the Impugned Order, reducing the redemption fine and penalty. The judgment emphasized the impact of the customs broker's advice on the incorrect declarations while addressing the appellant's plea for leniency due to business losses.

This comprehensive analysis covers the issues of incorrect declarations, imposition of fines and penalties, and the Tribunal's decision to reduce the penalties based on the circumstances presented during the appeal.