2018 (9) TMI 49 - AT - Customs

Penalty - Confiscation of imported goods - mis-declaration of the description of goods - Held that - The Lower Authorities have not accepted the stands of the assessee that they came forward for the retest but extending the benefit of doubt to the appellant, the penalty imposed upon him can be reduced, especially in view of fact that they have cleared goods on payment of higher rate of duty as also on payment of redemption fine of ₹ 20 lakhs - penalty reduced from ₹ 6.50 lakhs to ₹ 3 lakhs - appeal allowed in part.

Summary

Issues: Mis-declaration of imported goods, penalty imposition under Section 112 of the Customs Act, 1962.

Analysis:

1. The judgment revolves around the mis-declaration of imported goods by the appellant, who declared the goods as Re-melted Brass Ingots but were found to be Re-melted Copper Ingots upon testing, with a higher value than declared. The appellant acknowledged the mis-declaration, attributing it to a mix-up by the foreign supplier. The Lower Authorities did not accept the appellant's explanation, leading to the confiscation of goods with a redemption fine of ?20 lakhs and a penalty of ?6.50 lakhs under Section 112 of the Customs Act, 1962.

2. The appellant did not contest the charges of mis-declaration, valuation, or confiscation, having paid the higher duty and redemption fine to clear the goods. The only challenge in the appeal was against the penalty of ?6.50 lakhs. The appellant argued for a reduction in the penalty considering the mix-up at the supplier's end, cooperation with Customs Authorities, and willingness for retesting.

3. Despite the Lower Authorities' skepticism about the appellant's cooperation for retesting, the Tribunal, giving the benefit of the doubt, decided to reduce the penalty to ?3 lakhs from the initial ?6.50 lakhs. This reduction was based on the appellant's payment of higher duty and redemption fine, indicating a willingness to rectify the situation. The appeal was rejected except for the penalty reduction.

4. The judgment highlights the importance of accurate declaration of imported goods, the consequences of mis-declaration under the Customs Act, and the possibility of penalty reduction based on cooperation and rectification efforts by the importer. The decision showcases a balance between penalizing non-compliance and acknowledging corrective actions taken by the appellant.