2020 (11) TMI 87 - HC - Customs

Levy of penalty u/s 114 of Customs Act - Duty Drawback claim - export of tissue paper in sheet form - allegation that petitioner wrongly declared the goods under Serial No.40030010 in 'tissue paper in roll form' and claimed 7.2% of drawback wrongly - HELD THAT - When the petitioner had admitted of having wrongly quoted the DBK code for the goods and thereafter rectified it itself would amount to misclassification and thereby attempted to export the goods improperly. A mere plea of 'inadvertence' may not absolve the petitioner and grant them immunity from penalty. The discretion of levying penalty is always available with the Statutory Authority under Section 114, whenever such an Authority is of the view that an attempt to export the goods are in such a nature that the goods would be liable to be confiscated under Section 113 - Since the Original Authority was of the opinion that the petitioner attempted to export the goods through misclassification, this Court is of the view that the Authority was justified in levying the penalty. The confiscation order, with an option to redeem on payment of redemption fine, was set aside by the Appellate Authority only on the ground that the goods, since already exported, were not available for confiscation and therefore, the confiscation order is bad in law. It was not the finding of the Appellate Authority that the petitioner had not attempted to export the goods improperly. Hence, a mere setting aside of the confiscation order and the option of redemption, will not entitle the petitioner to escape his liability from penalty. Petition dismissed.

Summary

Issues:
Misclassification of goods for export, imposition of penalty under Section 114 of the Customs Act, challenge to the penalty imposition, applicability of revision under Section 129(DD) of the Act, interpretation of relevant legal provisions, distinction of case law precedents.

Analysis:

1. Misclassification of Goods for Export:
The petitioner had initially declared the goods under the wrong classification, leading to a higher claim of drawback. The Customs authorities noticed the misclassification, which was rectified after investigation. The misdeclaration was acknowledged by the petitioner, resulting in a penalty imposition under Section 114 of the Customs Act.

2. Imposition of Penalty under Section 114 of the Customs Act:
The penalty was imposed due to the attempt to export goods improperly by misclassifying them. The court held that the rectification of the misclassification did not absolve the petitioner from penalty, as it constituted an attempt to export goods in a manner that would be liable for confiscation under Section 113 of the Act.

3. Challenge to Penalty Imposition and Revision under Section 129(DD) of the Act:
The petitioner challenged the penalty imposition through a revision under Section 129(DD) of the Act, which was subsequently dismissed. The court emphasized that the power to revise is a statutory authority of the Central Government, and the rejection of the revision did not warrant a review of the original orders under Section 129D of the Act.

4. Interpretation of Relevant Legal Provisions and Case Law Precedents:
The court analyzed the legal provisions under the Customs Act and referred to case law precedents to determine the applicability of penalty in cases of misclassification for export. The court distinguished previous judgments cited by the petitioner, emphasizing that the factual circumstances were different in the present case.

5. Final Decision:
After considering the arguments presented, the court found no merit in the Writ Petition and dismissed it. The court upheld the imposition of the penalty under Section 114 of the Customs Act, stating that the misclassification constituted an attempt to export goods improperly, justifying the penalty imposition despite the rectification of the error.

By providing a detailed analysis of the judgment, the court's reasoning behind upholding the penalty imposition and dismissing the Writ Petition is evident, ensuring a comprehensive understanding of the legal issues involved in the case.