1988 (2) TMI 247 - AT - Customs

Summary

Issues Involved:
1. Mis-declaration of value and evasion of customs duty.
2. Violation of Import Trade Control regulations.
3. Incorrect customs duty classification in Bills of Entry.
4. Imposition of redemption fine and penalty.

Detailed Analysis:

1. Mis-declaration of Value and Evasion of Customs Duty:
The appellant entered into a contract for the purchase of 1000 M/Tons of High-Density Polyethylene (HDPE) at US $530 per M/Ton from a Singapore supplier, but the goods were supplied by a Hungarian supplier at US $605 per M/Ton. The appellant filed Bills of Entry with documents showing a lower price, which were later found to be dubious. The true invoice from the Hungarian supplier indicated a higher price, and the authorities confirmed that the appellant mis-declared the value to evade customs duty. The Collector confirmed the value of US $605 per M/Ton for customs duty assessment.

2. Violation of Import Trade Control Regulations:
The appellant incorrectly stated that the goods were covered by the Open General Licence. Upon scrutiny, two of the import licenses produced were found invalid. The appellant claimed to have offered more licenses during the personal hearing, but the Collector noted that no additional licenses were actually submitted for examination.

3. Incorrect Customs Duty Classification in Bills of Entry:
The appellant incorrectly classified the goods under heading 3901.10 instead of 3901.20 in the Bills of Entry. Although this was noted, the authorities could have corrected the classification based on the correct description of the goods provided by the appellant.

4. Imposition of Redemption Fine and Penalty:
For the mis-declaration of value and violation of Import Trade Control, the Collector ordered confiscation of the goods but allowed redemption on payment of a fine. The fines were Rs. 3.5 lakhs for each of the four consignments and Rs. 3.15 lakhs for the fifth consignment, along with a penalty of Rs. 1 lakh per case. The Tribunal upheld the Collector's findings of fraudulent conduct and intent to evade customs duty, confirming the need for a deterrent fine and penalty. However, considering the demurrage and container charges accrued due to the detention of goods, the Tribunal reduced the redemption fine to Rs. 2 lakhs per case, totaling Rs. 10 lakhs.

Conclusion:
The Tribunal dismissed all five appeals, confirming the Collector's findings and penalties, with a minor relief in the amount of the redemption fine due to unavoidable demurrage charges.