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2024 (6) TMI 635 - AT - CustomsMisclassification and misdeclaration of goods for availing export incentives and to avail higher rate of drawback - Copper Strips/Earth Rod (in Coil form) - to be classified under CTH 85381090 or not - levy of penalty. HELD THAT - The cargo declared for exports by M/s. Horizon Enterprises was of copper rods and the cargo being exported by M/s Basant Global Trade Pvt. Ltd. is copper strips. The clearances of both the cargo was given to the forwarder Mr. Rajvardhan Jha of M/s Shivarpan Enterprises. The truck carrying the cargo of M/s. Horizon enterprises, Mumbai arrived the CFS gate first, but the checklist for shipping bill in respect of the cargo of M/s. Basant Global Trade Pvt. Ltd. was produced in its place by mistake. Incidentally, both the cargo were 52MT. In such circumstances, it is clear that the disputed cargo was not relating to the bill of entry No. 5573040 filed by the Appellant No. 1. There is no doubt that the disputed consignment was first time exported by the Appellant No. 1 and when the suspicious and misleading and manipulation of facts came in knowledge of the Appellant No. 1, they approached the Chief Commissioner of Customs, The Principal Commissioner of Customs, Kandla Mundra Port and later the Deputy Commissioner of Customs, Customs House, Mundra on 04.05.2017. Thereafter Appellant appointed new CHA M/s Eiffel Logistics Pvt. Ltd. and after the guidance of new CHA and department they amended the shipping bill No. 5573040 dtd. 21.04.2017 and goods were then exported vide amended shipping bill No. 5573040 dtd. 21.04.2017. As per the appellant No. 1 due to extreme delay in exports, price fluctuations and Ramzan time in UAE, the buyer refused to take the delivery and ultimately the goods had to be re-imported by the Appellant No. 1 vide Bill of Entry No. 2364586 dtd. 07.07.2017. The imposition of any redemption fine and penalties on the allegations and findings of misdeclaration of goods cannot be held to be justified, the same is aside. Imposition of penalties on Appellant No. 2 - HELD THAT - It is found that no case of aiding and abetting is made out against this appellant. There is no case made out of any abnormal gain by the appellant to indicate any collusion or abetment on his part with the exporter of the consignment under dispute. The Appellant filed the Shipping Bill based upon the information given to him by the exporter and is not expected to investigate and find out the correct declaration of the value and of the goods. In any case, Appellant who apparently acted in a bona fide manner in terms of the instructions of the exporter cannot be penalized on the ground of abetment of any offence of the disputed export goods. In the orders of the lower authorities, the action against the appellant was taken alleging the contravention of regulations of CBLR, 2009, however no action under CBLR, 2009 such as suspension of CB licence, revocation of licence etc. was taken. This itself shows that there is no mala fide on the part of the appellant No. 2. The impugned order relates to the present appellants is set aside - appeal allowed.
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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