2019 (10) TMI 1155 - AT - Customs

EPCG scheme - import of machinery - undeclared spares - Benefit of N/N. 64/2008-Cus dated 9th May 2008 denied - non-declaration of goods on which duty had been paid along with the capital goods cleared earlier - appellant claims non-declaration due to ignorance of the shipment in the impugned consignment - HELD THAT - The unutilised component of the transfer release advice of ₹ 9,88,063 has not been made available to the appellant in consequence of the findings in the impugned order that additional fee to cover excess imports effected against the discretionary enhancement, as laid down in paragraph 5.10 of Handbook of Procedures, has not been complied with. If that be so, the denial of the adjustment of duty saved against the impugned goods-declared and undeclared-would be tenable. However, the appellant has placed on record that the maximum fee mandated in the Policy has already been deposited; accordingly, the provisions in paragraph 5.10 of Handbook of Procedures is rendered inoperable. The appellant is entitled to adjustment of duty saved to the extent of the amount in the transfer release advice and the recovery of duty, if any, is to be restricted to any excess due thereafter. Thus, only the undeclared goods valued at ₹ 32,58,755 are liable to confiscation under section 111 of Customs Act, 1962 - redemption fine as well as penalty reduced - appeal allowed in part.

Summary

Issues:
1. Denial of benefit of notification no. 64/2008-Cus dated 9th May 2008.
2. Assessment of duty on undeclared goods.
3. Confiscation of consignments and imposition of penalties.

Analysis:
1. The appeal involved the denial of the benefit of notification no. 64/2008-Cus dated 9th May 2008 to M/s Microqual Techno Pvt Ltd by the Commissioner of Customs. The appellant had claimed benefits under the notification for the import of machinery and spares valued at &8377; 25,94,376. However, discrepancies were found during examination, leading to the denial of benefits, recovery of unpaid duty, and imposition of penalties under the Customs Act, 1962. The appellant sought extension of the notification benefits to declared goods and adjustment of duty savings on undeclared goods.

2. The appellant's contention regarding the non-declaration of goods on which duty had been paid earlier due to ignorance was challenged. The tribunal noted that the appellant's claim of ignorance was not credible, as correspondence with the supplier indicated prior knowledge of the shipment. The tribunal found no evidence to support the appellant's claim that the undeclared goods were remnants of earlier consignments. Consequently, separate assessment and confiscation of undeclared goods were upheld, along with other detriments.

3. Regarding the confiscation of goods and penalties imposed, the tribunal reduced the fine for redemption and limited the penalty under section 112 of the Customs Act, 1962. It was observed that the appellant was entitled to adjust the unutilized duty savings against the impugned goods. The tribunal directed compliance with modifications to the applicability of the 'transfer release advice' and disposed of the appeal by pronouncing the order in open court on 19/09/2019.