2024 (8) TMI 29 - AT - Customs

Benefit of N/N. 53/2011-Cus. dated 1.7.2011 - clearance of Merbau Sawn Timber Blocks - Country-of-Origin Certificate produced by the appellant was not in the prescribed format - mis-declaration and suppression of facts - levy of penalty under Section 114A and Section 114AA of the Customs Act, 1962. HELD THAT - It is an admitted fact by the appellant that they had produced a wrong certificate of Country of Origin to claim the benefit of the said Notification. And this came to the notice of the Department only when detailed investigations were undertaken by the department. In view of the above having accepted mis-declaration and paid the entire amount of duty along with interest and the reduced penalty, the appellant cannot now claim that there was no mis-declaration. Therefore, the duty amount along with interest and reduced penalty already paid stands confirmed. On appeal before the Commissioner (Appeals), the appellant claimed the benefit of Notification No.46/2011-Cus. dated 01.06.2011 read with Notification No.189/2009-Cus (N.T.) dated 31/12/2009. The Commissioner in the impugned order has clearly stated that the benefit of the above Notification was not part of the show-cause notice and hence, it is an afterthought. The Commissioner (Appeals) also states that the same cannot be extended as the said certificates were to be produced at the time of clearance and the said certificates are to be issued by the exporting country. Therefore, the question of extending the benefit of a new Notification which was not claimed at the time of filing the Bill of Entry cannot be extended as the same cannot be verified as the goods have already been cleared. Levy of penalty under Section 114A and Section 114AA of the Customs Act, 1962, on the ground that both are independent of each other and having admittedly produced a wrong Country of Origin certificates - HELD THAT - The proprietor and the firm being one and the same, penalty cannot be imposed twice, one on the firm under Section 114A and another on the Proprietor under Section 114AA. Moreover, the offence committed in this case is production of wrong Country of Origin Certificate and therefore, based on the same offence, there cannot be two penalties on the same appellant. The appellant having already discharged the duty liability along with interest and penalty under Section 114A, there are no reason to impose penalty under Section 114AA. Accordingly, the penalty of Rs.45,00,000/- imposed on the appellant (Proprietor of M/s. Royal Timbers) cannot be sustained. The impugned order is upheld except for the imposition of the penalty under Section 114AA of the Customs Act, 1962 - the impugned order is modified and the appeal is disposed of.

Summary

Issues:
- Claim of benefit under Notification No.53/2011-Cus. dated 1.7.2011
- Compliance with prescribed conditions under Notification No.43/2011 Cus. dated 01.06.2011
- Suppression of facts and mis-declaration
- Imposition of duty, interest, and penalty
- Confiscation and redemption fine under Section 125 of the Customs Act, 1962
- Appeal against the Commissioner's order
- Applicability of penalty under Section 114AA of the Customs Act, 1962

Claim of Benefit under Notification No.53/2011-Cus. dated 1.7.2011:
The appellant filed a Bill of Entry claiming benefits under Notification No.53/2011-Cus. dated 1.7.2011 for the clearance of Merbau Sawn Timber Blocks. However, the 'Country-of-Origin' Certificate presented was not in the prescribed format, leading to the denial of benefits. Subsequent investigations revealed that the same incorrect certificate was used for previous 16 Bills of Entry, resulting in a demand for differential duty. The appellant argued that only 8 Bills had incorrect certificates and promptly paid the differential duty upon notification of ineligibility for the live Bill of Entry.

Compliance with Prescribed Conditions under Notification No.43/2011 Cus. dated 01.06.2011:
The appellant admitted to the incorrect 'Country of Origin' certificate, acknowledging the ineligibility for benefits under Notification No.53/2011-Cus. dated 1.7.2011. Despite the appellant's subsequent payment of the entire duty amount, interest, and a reduced penalty, the authorities confirmed the duty, citing suppression of facts and mis-declaration. The Commissioner (Appeals) upheld this decision, emphasizing the importance of producing genuine certificates as per prescribed conditions.

Suppression of Facts and Mis-declaration:
The appellant's use of an incorrect 'Country of Origin' certificate to claim benefits under Notification No.53/2011-Cus. dated 1.7.2011 was deemed a deliberate mis-declaration. The appellant's admission of fault and subsequent payment of the duty, interest, and penalty did not absolve them of the mis-declaration. The authorities maintained that suppression of facts warranted the demand for differential duty and penalties.

Imposition of Duty, Interest, and Penalty:
The authorities confirmed the demands for differential duty amounting to Rs.17,00,113/-, along with interest and an equal penalty on M/s. Royal Timbers. Additionally, a penalty of Rs.45,00,000/- was imposed on the appellant, the proprietor of M/s. Royal Timbers. The appellant contested the penalties based on case laws but failed to convince the authorities.

Confiscation and Redemption Fine under Section 125 of the Customs Act, 1962:
The goods under the live Bill of Entry were confiscated and later released upon payment of a redemption fine of Rs.3,00,000/- under Section 125 of the Customs Act, 1962. This action was taken in conjunction with the demands for differential duty, interest, and penalties imposed on M/s. Royal Timbers.

Appeal against the Commissioner's Order:
The appellant appealed the Commissioner's decision, arguing against the penalties imposed under Sections 114A and 114AA of the Customs Act, 1962. The Commissioner upheld the penalties, citing the appellant's deliberate use of incorrect certificates and the subsequent payment of dues as evidence of non-eligibility for benefits.

Applicability of Penalty under Section 114AA of the Customs Act, 1962:
The Tribunal noted that the appellant, having already paid the duty liability, interest, and penalty under Section 114A, could not be penalized again under Section 114AA for the same offense of producing an incorrect 'Country of Origin' certificate. Citing precedents, the Tribunal concluded that the penalty of Rs.45,00,000/- imposed on the appellant could not be sustained, modifying the impugned order accordingly.

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