2024 (5) TMI 904 - AT - Customs

Levy of Penalty u/s 112 - Scope of the show cause notice - Mis-declaration and re-classification of imported goods - re-classification done on the basis of visual inspection and no evidence produced by the department - Onus to prove the classification - Voluntariness and retraction of the statement made by the appellant - duty paid under protest - clearance of the goods declared as Copper Clad Laminates-AL grade classified under CTH 7474102100 - HELD THAT - The goods were put under preventive check and on examination were found to be mis-declared in terms of the description of the classification as they appeared to be Aluminium Paste Copper Clad Laminates classifiable under CTH 76061200. Hence the goods were seized u/s 110 of the Act on the reasonable belief that the same are liable to confiscation under section 111 of the Act. It is evident that the appellant has voluntarily accepted and admitted that the goods have been mis-classified due to mistake and, therefore, paid the differential customs duty. The principle settled by judicial pronouncements is clear that once the party admits, the same need not be proved by the department. Issue of retraction - The statement was made on 25.03.2021 and the retraction was made vide communication dated 16.04.2021, which is nothing but afterthought and belated action and hence no reliance can be placed thereon. Also no other material has been placed on record to corroborate the fact that the statement were recorded under the exhortation and duress. Duty paid under protest - The statement dated April 16, 2021 that they paid the differential duty amount under protest is just an afterthought and has no evidential value and, therefore, the plea needs to be rejected. Penalty u/s 112 - No show cause notice has been issued proposing the demand of differential duty or the penalty. On adjudication, the penalty was imposed only under section 114A of the Act and there was no reference at all to the provisions of section 112 of the Act. Once the appellant has challenged the said order in original, it was incumbent upon the appellate authority to decide the issues under challenge which was the differential duty amount and the penalty u/s 114A. Thus, Commissioner (Appeals) travelled beyond the jurisdiction in the matter of imposing penalty u/s 112 of the Act and, therefore, the same is set aside. To the extent the impugned order stands modified. The appeal is, accordingly, partially allowed.

Issues Involved:
1. Mis-declaration and re-classification of imported goods.
2. Imposition of differential customs duty.
3. Confiscation and redemption fine.
4. Imposition of penalty under Section 114A and Section 112 of the Customs Act, 1962.
5. Validity of retraction of statements by the appellant.
6. Payment of differential duty 'under protest'.

Issue-wise Detailed Analysis:

1. Mis-declaration and Re-classification of Imported Goods:
The appellant filed a Bill of Entry for goods declared as "Copper Clad Laminates-AL grade" under CTH 7474102100. Upon examination, the goods were found to be "Aluminium Paste Copper Clad Laminates," classifiable under CTH 76061200, leading to their seizure under Section 110 of the Customs Act, 1962, on the belief that they were liable to confiscation under Section 111 of the Act. The partner of the appellant company accepted the revised classification and agreed to pay the differential customs duty.

2. Imposition of Differential Customs Duty:
The adjudicating authority calculated the duty liability to be Rs. 9,67,241/-. Since the appellant had already paid Rs. 7,63,540/-, the differential duty of Rs. 2,03,701/- was levied. The goods were ordered to be confiscated under Section 111(m) of the Act, with an option to redeem them on payment of a redemption fine of Rs. 50,000/- under Section 125 of the Act.

3. Confiscation and Redemption Fine:
The goods were confiscated due to mis-declaration, and the appellant was given an option to redeem them by paying a fine. The confiscation was upheld by the Commissioner (Appeals), and the redemption fine was confirmed.

4. Imposition of Penalty under Section 114A and Section 112:
The adjudicating authority initially imposed a penalty of Rs. 2,03,701/- under Section 114A of the Act. On appeal, the Commissioner (Appeals) set aside the penalty under Section 114A and imposed a penalty of Rs. 20,370/- under Section 112 of the Act, relying on the decision in Nagpur International. The Tribunal found that the appellate authority had no jurisdiction to impose a penalty under Section 112, as it was not part of the original adjudication order. Thus, the penalty under Section 112 was set aside.

5. Validity of Retraction of Statements by the Appellant:
The appellant's partner retracted his statement, claiming it was made under duress. The Tribunal noted that the retraction was made after the order in original was passed and considered it an afterthought. The Tribunal held that the retraction had no evidential value, relying on the decision in Hanuman Prasad vs. Collector of Customs, Jaipur, and other similar cases.

6. Payment of Differential Duty 'Under Protest':
The appellant claimed that the differential duty was paid 'under protest'. However, the Tribunal found no evidence in the challan to support this claim. The statement made on April 16, 2021, that the duty was paid under protest, was considered an afterthought and was rejected.

Conclusion:
The Tribunal partially allowed the appeal. The imposition of penalty under Section 112 by the Commissioner (Appeals) was set aside as it was beyond jurisdiction. The confiscation, redemption fine, and differential customs duty were confirmed. The appeal was allowed to the extent of setting aside the penalty under Section 112 of the Customs Act, 1962.

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