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Issues:
1. Misdeclaration of country of origin on imported goods. 2. Applicability of Section 11 [111] of the Customs Act. 3. Exemption under Section 117 of the Trade and Merchandise Act. Analysis: Issue 1: Misdeclaration of country of origin on imported goods The case involved the import of industrial sewing machines where the bill of entry declared the country of origin as China, but the inspection revealed the actual country of origin as Japan. The Customs authorities held that the absence of the correct country of origin constituted misdeclaration, leading to confiscation of goods and imposition of penalties. The appellants argued for the waiver of show cause notice and adjudication. The Tribunal examined the provisions of Section 117 of the Trade and Merchandise Act, which require the country of origin to be affixed on imported goods. However, an exemption under sub-section (d) of the notification applies to goods imported for personal use and not for trade purposes. As the imported sewing machines were used in the appellants' factory for manufacturing final products, the provisions of Section 117 did not apply. Citing a previous Tribunal decision, the Tribunal concluded that the misdeclaration was technical in nature, leading to the setting aside of the Order-in-Appeal and allowing the appeal. Issue 2: Applicability of Section 11 [111] of the Customs Act The adjudicating authority and the appellate authority invoked Section 11 [111] of the Customs Act, 1962, to justify the confiscation of goods and imposition of penalties due to the misdeclaration of the country of origin. The appellants argued that Section 11 [111] applies only to goods covered under specific sections of the Trade and Merchandise Marks Act, 1958. They relied on previous decisions to support their stance. The Tribunal considered both sides' submissions and examined the facts of the case. It clarified that the dispute centered on the absence of the country of origin on the imported goods. By analyzing the provisions of the Trade and Merchandise Act and relevant notifications, the Tribunal determined that the exemption under Section 117 applied in this scenario, leading to the setting aside of the impugned Order-in-Appeal. Issue 3: Exemption under Section 117 of the Trade and Merchandise Act The Tribunal delved into the specifics of Section 117 of the Trade and Merchandise Act, particularly the notification requiring the indication of the country of origin on imported goods. It highlighted the exemption clause for goods imported for personal use and not for trade purposes. By establishing that the imported sewing machines were utilized in the factory for manufacturing final products, the Tribunal concluded that the exemption under Section 117 applied, thereby overturning the Order-in-Appeal and granting consequential relief to the appellants.
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