2023 (5) TMI 667 - AT - Customs

Deletion of penalty u/s 114A of Customs Act - confiscation ordered observing that the goods were mis-declared as to quantity - HELD THAT - There is error in findings recorded in Commissioner (Appeals) as to penalty. There is no mention of Section 28 anywhere in the adjudication order. As such, the adjudication order is definitely under Section 17 of the Act. Further, the appellant have admitted the mis-declaration and have prayed for decision on merits, as the imported goods were ready market due to Covid Panedmic disturbances, which was at its peak during the relevant time. However, it is found that there is some arbitrariness in the valuation done by the registered valuer, which is on higher side by 25%. The penalty under Section 114A of the Act is confirmed - the quantum of penalty reduced to Rs. 5 lakhs - appeal allowed in part.

Summary

Issues: Misdeclaration of goods, Undervaluation, Confiscation, Penalty under Section 114A

For the issue of misdeclaration of goods, the appellant imported oxygen concentrators and oximeters during the second wave of Covid. Upon inspection, the goods were found misdeclared in terms of quantity and description. The goods were undervalued, and the importer failed to provide evidence of contemporaneous imports. The goods were revalued by a Government authorized valuer at a higher value than declared, leading to a demand for differential duty and confiscation under Section 111 (l) & (m) of the Customs Act. The importer admitted to the misdeclaration and agreed to the revaluation, thus waiving the right to show cause notice. The Adjudicating Authority found deliberate misdeclaration and imposed a penalty under Section 114A of the Act for failure to make a truthful statement declaration.

Regarding undervaluation, the Adjudicating Authority rejected the declared value and accepted the revaluation done by the authorized valuer. The differential duty was demanded, and the goods were held liable to confiscation under Section 111 (l) & (m) of the Customs Act. A penalty was imposed under Section 114A for misdeclaration and failure to provide independent correspondence to substantiate the plea of mistake by the shipper.

The Commissioner (Appeals) confirmed the findings of misdeclaration, upheld the method of revaluation, and reduced the redemption fine by 50% considering the urgency of the goods due to the Covid pandemic. However, the penalty under Section 114A was set aside by the Commissioner (Appeals) on the grounds of no wilful misstatement or suppression being established.

The Revenue appealed against the deletion of penalty under Section 114A, arguing that the findings on misdeclaration and undervaluation support the imposition of the penalty. The Tribunal found an error in the Commissioner (Appeals) order regarding the penalty, noting that the misdeclaration was admitted by the importer and the valuation done by the registered valuer was on the higher side. The penalty under Section 114A was confirmed but reduced to Rs. 5 lakhs, and the appeal was allowed in part.

In conclusion, the Tribunal allowed the appeal, modifying the impugned order and confirming the penalty under Section 114A at a reduced quantum. The appeal was disposed of along with the stay application.