2019 (10) TMI 379 - AT - Customs

Exemption from CVD - Misdeclaration of imported goods - Appellants had imported Molybdenum Ore Concentrate declaring the same as Molybdenum Ore - benefit of N/N. 04/2006-CE dated 01.03.2006 - Time limitation - HELD THAT - Section 28 of the Customs Act, 1962 was amended by the Finance Act, 2011 to prescribe normal period of limitation as one year from the relevant date - SCN issued within one year from the date of filing of Bill of Entry, is definitely within the normal period of limitation and demand made therein cannot be held to be hit by limitation under Section 28 of the Customs Act, 1962. It is a fact that the goods imported are nothing but Molybdenum Concentrate and appellants have declare the same as Molybdenum Ore on the Bill of Entries and the documents relating to import clearance. In view of the mis-declaration made the goods have been held liable for confiscation under Section 111(m) of the Customs Act, 1962, but not confiscated as they were not available for confiscation. Commissioner has also not imposed any redemption fine on the appellant hence we do not discuss this aspect any further as this issue of confiscation has become irrelevant. Penalties - HELD THAT - However for the acts of omission and commission leading to misdeclaration of the goods for which they had become liable for confiscation under Section 111, Commissioner has imposed penalty under Section 112(a) and we uphold the same. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Confiscation of goods under Section 111(d) and (m) of the Customs Act, 1962.
2. Demand and recovery of differential customs duties under Section 28(1) of the Customs Act, 1962.
3. Recovery of interest on differential customs duties under Section 28AA of the Customs Act, 1962.
4. Imposition of penalties under Section 112(a) of the Customs Act, 1962.
5. Final assessment of certain Bills of Entry as per Section 18 of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Confiscation of Goods:
The Commissioner ordered that goods valued at ?8,41,44,815/- in respect of four Bills of Entry were liable for confiscation under Section 111(d) and (m) of the Customs Act, 1962 due to mis-declaration. However, as the goods were not available for confiscation, no redemption fine was imposed.

2. Demand and Recovery of Differential Customs Duties:
The Commissioner demanded and ordered the recovery of differential customs duties amounting to ?91,50,097/- from the appellant, M/s Sarkar Ferro Alloys Pvt Ltd., under the proviso to Section 28(1) of the Customs Act, 1962. The appellants had imported Molybdenum Ore Concentrate but declared it as Molybdenum Ore to claim an exemption from Countervailing Duty (CVD) under notification No 04/2006-CE dated 01.03.2006. Investigations revealed that the exemption was not admissible as the imported item was Molybdenum Ore Concentrate, not Molybdenum Ore.

3. Recovery of Interest:
Interest on the differential customs duties was ordered to be recovered under Section 28AA of the Customs Act, 1962. The appellants argued that no interest could be demanded when the demand itself was not payable, citing Pratibha Processors and Jayathi Krishna & Co. However, the Tribunal upheld the demand for interest, referencing several decisions including P V Vikhe Patil SSK and Kanhai Ram Thakedar.

4. Imposition of Penalties:
Penalties were imposed under Section 112(a) of the Customs Act, 1962:
- ?10,00,000/- on M/s Sarkar Ferro Alloys Pvt Ltd.
- ?1,00,000/- on Shri Ramesh Shah, Director of M/s Sarkar Ferro Alloys Pvt Ltd.

The Tribunal upheld these penalties, stating that the mis-declaration of goods warranted such penalties. The appellant's reliance on various case laws to argue against the penalties was not found persuasive.

5. Final Assessment of Bills of Entry:
The final assessment of Bills of Entry No 778026 dated 22.03.2011, 316405 dated 07.04.2011, and 4432424 dated 23.08.2011 was ordered to be done as per Section 18 of the Customs Act, 1962. The Tribunal did not find any reason to alter this part of the Commissioner’s order.

Conclusion:
The appeal was dismissed, and the cross objections were disposed of accordingly. The Tribunal upheld the Commissioner’s findings on the liability for confiscation, demand of differential duties, recovery of interest, and imposition of penalties, aligning with the precedent set by the Hon’ble Apex Court in the case of Star Industries and other relevant judgments.