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2024 (6) TMI 635 - AT - Customs


Issues involved:
The issues involved in this case are misclassification and misdeclaration of goods for availing export incentives, imposition of penalties under Section 114 of the Customs Act, 1962, violation of Principles of Natural Justice, and the validity of the orders passed by the lower authorities.

Misclassification and Misdeclaration of Goods:
The case involved misclassification and misdeclaration of goods by M/s Basant Global Trade Pvt. Ltd. and M/s Pravin Bhatt & Sons to avail higher rates of drawback. The investigation revealed that the goods were misdeclared as 'Copper Earth Rods' instead of 'Copper Bonded Iron Rods' to benefit from higher duty drawback. The adjudicating authority ordered confiscation of the goods and imposed penalties under Section 113 (h), 114 (ii), and 114AA of the Customs Act, 1962. The appellants challenged this order before the Commissioner (Appeals) and subsequently before the Tribunal.

Contentions of Appellant No. 1:
Appellant No. 1 argued that they were not involved in the export of the misdeclared goods and that the misdeclaration was done by another party. They highlighted that they took immediate steps upon suspecting the misdeclaration, approached the Customs department, and amended the shipping bill to rectify the error. They contended that the penalties imposed were unjustified as they acted in good faith and cooperated with the authorities.

Contentions of Appellant No. 2:
Appellant No. 2 argued that they prepared and filed the shipping bills based on information received from the exporter and had no prior knowledge of the misdeclaration. They emphasized that no evidence suggested their involvement in the misdeclaration and that the penalties imposed were based on allegations that were not properly investigated as per the prescribed procedure.

Tribunal's Decision:
After considering the arguments and evidence presented by both sides, the Tribunal found that the disputed cargo was not related to the bill filed by Appellant No. 1. The Tribunal noted that Appellant No. 1 took prompt action upon discovering the discrepancies and rectified the error by amending the shipping bill. The Tribunal cited previous judgments to support the principle that penalties should not be imposed when the party acts in good faith and takes immediate corrective measures.

Conclusion:
The Tribunal set aside the orders of the lower authorities and allowed both appeals, providing consequential reliefs to the appellants. The Tribunal found that the penalties imposed on both appellants were not justified given the circumstances of the case and the actions taken by the appellants upon discovering the misdeclaration.

Judgment Date:
The judgment was pronounced in the open court on 13.06.2024.

 

 

 

 

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