2004 (10) TMI 205 - AT - Customs

Summary

Issues: Misdeclaration of goods, Confiscation of goods, Penalty imposed, Re-export of goods

Misdeclaration of Goods:
The case involved the import of 'Mulberry Raw Silk - 4A grade' from China, which was later found to be of grade 'B' instead of the declared grade '4A'. The Central Silk and Technological Research Institute (CSTRI) confirmed the misdeclaration. However, the importer's order details and the supplier's invoice matched the Bill of Entry's description, indicating no misdeclaration. The Tribunal ruled that the discrepancy in grade did not automatically imply misdeclaration. As the goods did not violate Section 111 of the Customs Act, the confiscation order was set aside, leading to the cancellation of the penalty under Section 112(a).

Confiscation of Goods and Penalty Imposed:
The original authority confiscated the goods and imposed a penalty on the importer based on the alleged misdeclaration of the grade of 'Mulberry Raw Silk'. The Commissioner (Appeals) reduced the fine and penalty but allowed re-export of the goods. The Tribunal found no evidence of misdeclaration, leading to the reversal of the confiscation order and the penalty under Section 112(a). The appeal in favor of the importer was allowed.

Re-export of Goods:
The Revenue challenged the re-export of the goods, citing a Supreme Court ruling that disallowed re-export for goods liable to confiscation under Section 111. However, as the Tribunal cleared the goods from confiscation under Section 111, the re-export was allowed. The Tribunal referenced a previous case and upheld the Commissioner (Appeals)' decision to permit re-export. The Revenue's appeal against re-export was rejected, and the Department's application for stay was dismissed.

In summary, the Tribunal ruled in favor of the importer, overturning the confiscation and penalty due to the lack of misdeclaration evidence. The re-export of the goods was permitted as the goods were not liable to confiscation under Section 111. The decision highlighted the importance of accurate documentation matching the declared goods to avoid misdeclaration allegations and subsequent penalties.