2019 (3) TMI 423 - AT - Customs

Duty Drawback - Section 74 of the Customs Act, 1964 - the goods presented for re-export were found to be different from the goods imported against the B/E as claimed by the appellants - Held that - On examination the said goods were found not to be tallying with the goods imported by the Appellants against B/E s on which duty now claimed as drawback was paid. It was found that Sr No mentioned on the items was changed and fresh Sl No, chiseled on the said goods - in terms of Rule 4 of Re-Export of Imported Goods (Drawback of Custom Duties), Rule 1995, appellant were required to make declaration on the Shipping Bill not only in respect of goods entered for exportation and their value but also in respect of the drawback being claimed by them in terms of Section 74. Any misdeclaration in respect of the drawback claimed shall be construed as a mis-declaration. Section 113(i), is not restricted to mis-declaration in respect of value or description of goods entered for exportation, but if the mis-declaration is an respect of any particulars with the entry made under this Act then also goods liable for confiscation. The entries made on the shipping bill in respect of the details of import under Rule 4 referred above are definitely made under this Act, any misdeclaration of the same will attract Section 113(i) - In the present case the appellants have entered the goods with the Sr No chiseled on them. Prima facie appellants have tried to manipulate the goods so as to tally them with the goods imported. When the goods were found not to be in accordance with the goods imported by them against the B/E s referred they took recourse to other evidences and claimed that on the basis of computer records and other evidences they can establish the identity of the goods. However reading of rule 4 will make it evident if there any difficulty being faced by the Appellants in establishing identity the then appellants should have approached Commissioner and sought his intervention by establishing the identity with other records. Having not done so, they manipulated the marking and numbers on the good to establish the identity with the imported goods - such an approach is nothing but an act of mis-declaration which render the goods liable for confiscation. Since the goods have been rendered liable for confiscation under Section 113 (i) the penalty under Section 114 will follow - however, quantum of redemption fine and penalty is reduced. Appeal allowed in part.

Summary

Issues Involved:
1. Confiscation of goods under Section 113(i) of the Customs Act, 1962.
2. Denial of drawback claims under Section 74 of the Customs Act, 1962.
3. Imposition of penalty under Section 114(iii) of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Confiscation of Goods under Section 113(i) of the Customs Act, 1962:
The Commissioner of Customs (Export) Nhava Sheva ordered the confiscation of goods valued at ?2,24,95,570/- under Section 113(i) of the Customs Act, 1962. The goods presented for re-export were found to be different from those imported, with discrepancies in serial numbers and markings, leading to the conclusion that the goods were misdeclared. The Tribunal upheld that any misdeclaration in respect of value or material particulars with the entry made under the Act renders the goods liable for confiscation under Section 113(i). However, the Tribunal acknowledged the appellant's argument that they had not intended to falsify the goods and that the markings present were the same as at the time of import. Despite this, the Tribunal concluded that the manipulation of serial numbers constituted misdeclaration, justifying confiscation.

2. Denial of Drawback Claims under Section 74 of the Customs Act, 1962:
The Commissioner rejected the drawback claims of ?30,80,589.60 and ?18,45,052.00 under Shipping Bills No. 3000001023 and 3000001024, respectively, as the identity of the goods as imported and duty-paid was not established. The Tribunal noted that under Rule 4 of the Re-Export of Imported Goods (Drawback of Custom Duties) Rules, 1995, the exporter must provide accurate descriptions and other particulars necessary for deciding eligibility for drawback. The Tribunal found that the appellants had manipulated the markings to establish the identity of the goods, which was not permissible. Therefore, the denial of the drawback claims was upheld.

3. Imposition of Penalty under Section 114(iii) of the Customs Act, 1962:
A penalty of ?20,00,000/- was imposed on the appellant under Section 114(iii) of the Customs Act, 1962, for attempting to claim ineligible drawback by misdeclaring the goods. The Tribunal upheld the imposition of the penalty, stating that since the goods were liable for confiscation under Section 113(i), the penalty under Section 114 would follow. However, the Tribunal found the penalty amount to be excessive and reduced it to ?7,50,000/-, considering the appellant's submission that they did not intend to export the goods due to delays and would use them in future projects within India.

Conclusion:
The Tribunal partially allowed the appeal by reducing the redemption fine from ?20,00,000/- to ?7,50,000/- and the penalty from ?20,00,000/- to ?7,50,000/-, while upholding the confiscation of goods and denial of drawback claims. The order of the Commissioner was otherwise upheld, and the appeal was disposed of accordingly.