2018 (6) TMI 264 - AT - Customs

Quantum of penalty u/s 114A of CA, 1962 - misdeclaration of goods evading Anti dumping duty - warehoused goods - It was found that six consignments out of the imported material were cold rolled stainless steel as against declaration of hot rolled - invocation of extended period of limitation - Held that - It is difficult to believe that the appellant-assessee was not aware of the fact that the goods were cold rolled and not hot rolled. The appellant-assessee being the said business is obviously aware of the product and its price in the market. In these circumstances, the assertion of the appellant-assessee that they were not aware that the product was cold rolled, cannot be accepted - the declaration regarding the nature of the product before Customs becomes a misdeclaration due to which the extended period of limitation can be invoked. Confiscation - Held that - It is a settled law that the confiscation cannot be made unless the goods are physically available for confiscation. It is seen that no seizure was made. The goods were only detained and later provisionally released - confiscation of only the goods which were detained and provisionally released can only be ordered. Testing of samples - case of appellant-assessee is that testing of samples was not done in respect of all the Bills of Entry, as no material in respect of certain Bills of Entry was available for testing - Held that - The charge regarding misdeclaration is based on the testing of samples from the consignments detained in the warehouse. No conclusion regarding misdeclaration can be made in respect of Bills of Entry in respect of which no material was available for the purpose of testing at warehouse - the demand of duty and the redemption fine in lieu of confiscation needs to be revised. The matter is remanded to the adjudicating authority for redetermination - appeal allowed by way of remand.

Summary

Issues:
Appeal against order rejecting declared value of imported goods, confiscation, imposition of redemption fine, demand of customs duty, and penalty under Section 114A of the Customs Act.

Analysis:
1. The appellant imported goods declaring them as 'hot rolled', but upon inspection, it was found that some consignments were 'cold rolled' stainless steel. Cold rolled steel attracts anti-dumping duty and is more expensive. Revenue issued a show cause notice for alleged evasion of duty and undervaluation. The Commissioner rejected the declared value, imposed fines, confirmed duty demand, and penalty under Section 114A. The appellant argued the demand was time-barred, citing lack of awareness about the exact nature of the goods and absence of mala fide intent, relying on precedents.

2. The Tribunal noted that the appellant's claim of being unaware of the nature of the goods was implausible given their business knowledge. The declaration as 'hot rolled' was deemed a misdeclaration, justifying the extended period of limitation. However, only goods physically available can be confiscated, and as no seizure occurred, confiscation was limited to the detained goods. Testing for misdeclaration was inconclusive for Bills of Entry without available samples, leading to a revision in the demand and fine.

3. The appellant's argument about the penalty under Section 114A not factoring in interest lacked specific findings in the impugned order. As the duty demanded needed revision, the Tribunal set aside the order and remanded the matter for redetermination by the adjudicating authority. The judgment highlighted the need for a thorough reassessment in light of the observations made during the proceedings.

This detailed analysis encapsulates the key legal aspects and arguments presented in the judgment, providing a comprehensive understanding of the issues addressed and the Tribunal's decision.