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2024 (2) TMI 1099 - HC - CustomsMis-declaration - Imported goods declared as Indonesia Robusta Coffee - 100% EOU - Goods imported was Coffee husk and not Coffee beans - confiscated goods under Sections 111(f), (l), (m) (o) of the Customs Act, 1962 - CESTAT has allowed the appeal that the importer can approach the concerned authority and submit a fresh application under Rule 5(1)(a) of Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017- HELD THAT - Shri. Javali is right in his submission that confiscation could not be ordered unless goods were seized. Further, since the respondent Unit is 100% EOU, even if there were to be a mistake in declaration, unless it is proved by the Customs Authority that the goods are not re-exported or sold in the domestic market, the entire issue remains revenue neutral in nature. In any event, the CESTAT has reserved liberty to the importer to submit a fresh application under Rule 5(1)(a) of the Rules. Thus, Revenue cannot have any grievance. Resultantly, this appeal must fail. Hence - The substantial questions of law raised in the appeal memorandum are answered in favour of the assessee and against the Revenue.
Issues involved: Mis-declaration of goods, confiscation of goods under Customs Act, 1962, liberal approach towards EOUs, appeal against Order-in-Original, directions by CESTAT.
Mis-declaration of goods: The respondent, a 100% EOU, imported goods declared as Indonesia Robusta Coffee beans but Customs Officers found them to be Coffee husk. The Commissioner of Customs passed an Order-in-Original confiscating the goods valued at Rs. 65,38,813 under Sections 111(f), (l), (m) & (o) of the Customs Act, 1962. The respondent challenged this before CESTAT, which held that a liberal approach should be taken to promote EOU activities. The CESTAT allowed the appeal, directing the importer to submit a fresh application under Customs Rules. Confiscation of goods under Customs Act, 1962: The Order-in-Original by the Commissioner of Customs confiscated the goods due to mis-declaration under Sections 111(f), (l), (m) & (o) of the Customs Act, 1962. However, the CESTAT found that confiscation could not be ordered without seizure of goods. The CESTAT also noted that since the respondent was a 100% EOU, the issue was revenue neutral unless it was proven that the goods were not re-exported or sold domestically. Liberal approach towards EOUs: The CESTAT emphasized the need for a liberal approach towards EOUs, stating that Customs Authorities should verify goods as per import documents and relevant approvals. The CESTAT allowed the appeal, granting the importer the opportunity to submit a fresh application under Customs Rules and directing the Customs Authorities to release the goods upon compliance. Appeal against Order-in-Original: The respondent appealed against the Order-in-Original passed by the Commissioner of Customs, which determined the assessable value of the goods and ordered confiscation. The CESTAT set aside the impugned order, allowing the importer to approach the concerned authority for a fresh application under Customs Rules. Directions by CESTAT: The CESTAT directed the importer to submit a fresh application under Customs Rules, providing information found during examinations of the goods. If the revised permission is not produced, Customs Authorities are to draw samples for testing. The Adjudication Authority will then pass appropriate orders based on the test report, giving the appellant a reasonable opportunity to respond.
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