2018 (4) TMI 1540 - HC - Customs

Penalty - confiscation of the excess quantity of the cut and polished diamonds of 299.33 carats - respondent s grievance was that penalty was not imposed by the adjudicating authority - Held that - there is finding of fact that, there has been a misdeclaration under clause (m) of Section 111 - It is also held that as required by Section 46, the importer has not declared true description, contents and value in the Bill of Entry - The Appellate Tribunal has rightly observed that it was a mitigating factor as observed by the adjudicating authority. There is no one to one co-relation with the consignments (consignment export) and the consignment of 299.33 carats imported which was not declared by the appellant at the time of import. Had there been complete co-relation between the export invoice and the import consignment, there could have been some justification for waiver of penalty. Penalty upheld - appeal dismissed - decided against appellant.

Summary

Issues:
1. Challenge to judgment by Customs, Excise and Service Tax Appellate Tribunal
2. Confiscation of excess quantity of diamonds
3. Imposition of penalty under Section 112(iii) of the Customs Act
4. Misdeclaration under Section 111 of the Customs Act
5. Lack of co-relation between export and reimported quantity

Analysis:

1. The appellant challenged a judgment by the Customs, Excise and Service Tax Appellate Tribunal, where both the appellant and Revenue's appeals were decided together. The Tribunal partly allowed the Revenue's appeal by imposing a penalty under Section 112(iii) of the Customs Act.

2. The case involved the confiscation of 299.33 carats of diamonds reimported by the appellant, which were found in addition to the originally exported consignment. The Commissioner of Customs ordered confiscation with an option to redeem on payment of a fine. The Tribunal upheld this confiscation and imposed a penalty on the appellant.

3. The appellant contested the penalty imposition, citing email messages indicating the intention to return the excess diamonds and the submission of corrected Bills of Entry. However, the Tribunal found that only a part of the exported goods was brought back, leading to misdeclaration under Section 111 of the Customs Act. The Tribunal also noted the lack of co-relation between the export and reimported quantities.

4. The Tribunal's decision was based on factual findings, including email evidence and statements from the appellant's General Manager admitting the oversight in declaring the diamonds. The Tribunal concluded that there was no justification for waiving the penalty, considering the appellant's history of exporting and reimporting diamond consignments.

5. Ultimately, the High Court found no substantial questions of law arising from the case and dismissed the appellant's appeal, upholding the Tribunal's decision to impose the penalty. The Court noted that the penalty was justified based on the material on record, affirming the Tribunal's findings regarding misdeclaration and lack of co-relation between the export and import quantities.