2024 (1) TMI 1127 - AT - Customs

Suppression of facts - Confiscation - redemption fine - penalty - Claim of exemption which was not available - GSL Artemia Brine Shrimp Foods - to be classified under CTH 05119911 or not? - eligibility to avail the preferential rate of IGST under Sl. No. 33 of the Notification No. 002/2017-Cus dated 28.6.2017 - HELD THAT - It is found that a penalty can be imposed and goods confiscated only if there is a breach of any specific provisions of the Act or law framed there under. What is made punishable under the Customs Act is the 'blameworthy' conduct of the importer. A mere claim of exemption by the importer cannot be visited by confiscation of goods along with fine and penalty. Further, charge of suppression could not have been brought against an importer if he has correctly described the goods in the Bill of Entry as held by the Apex Court in NORTHERN PLASTIC LTD. VERSUS COLLECTOR OF CUSTOMS CENTRAL EXCISE 1998 (7) TMI 91 - SUPREME COURT . Since the description of goods and classification done by the importer has been found correct and accepted by the department, it is found that the confiscation of the goods and imposition of fine was improper and merits to be set aside. The question of confiscation of the goods hence does not arise. Having found that the importer-appellant has not violated any provisions of the Act or rules, the penalty imposed upon them is set aside. The Hon ble Apex Court in ASSOCIATE BUILDERS VERSUS DELHI DEVELOPMENT AUTHORITY 2014 (11) TMI 1114 - SUPREME COURT held that the principle of judicial approach demands a decision to be fair, reasonable and objective. On the obverse side, anything arbitrary and whimsical would not satisfy the said requirement. The classification of GSL artemia Brine Shrimp Eggs under CTH 05119911 along with duty as finalized with respect to Bill of Entry No. 3450978 dated 3.10.2017 is not disturbed - confiscation of the goods and the fine imposed on the goods imported by the said Bill of Entry is set aside - the differential duty demand is set aside - Since no violation of law has been established the penalty imposed on M/s. Priyanka Enterprises is quashed - appeal disposed off.

Summary

Issues involved:
The issues involved in the judgment are the classification of imported goods, eligibility for duty exemption, imposition of redemption fine, demand for differential duty, confiscation of goods, violation of principles of natural justice, and imposition of penalty.

Classification of imported goods:
The importer filed a Bill of Entry seeking to avail preferential rate of IGST under a specific notification. The department contended that a different notification applied and demanded differential duty. The Tribunal found that the importer correctly described and classified the goods, hence set aside the demand for differential duty.

Eligibility for duty exemption:
The department imposed redemption fine on past clearances without issuing a Show Cause Notice. The Tribunal held that a penalty can only be imposed for breaching specific provisions, not for claiming an exemption. The confiscation of goods and imposition of fine were deemed improper and set aside.

Violation of principles of natural justice:
The Tribunal noted that the department erred in reopening a Bill of Entry without providing grounds through a Show Cause Notice. This violated the principles of natural justice as the importer was not given a chance to respond. The demand for differential duty was set aside, and the confiscation of goods was deemed unnecessary.

Imposition of penalty:
The Tribunal found that the importer did not violate any provisions of the Act or rules. Therefore, the penalty imposed on the importer was quashed. The judgment emphasized the need for fair, reasonable, and objective decisions, stating that arbitrary actions do not meet judicial requirements.

Conclusion:
The Tribunal upheld the classification of imported goods but set aside the confiscation of goods, redemption fine, demand for differential duty, and penalty imposed on the importer. The judgment aimed to ensure justice and fairness in the decision-making process, providing consequential relief to the importer as per law.