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2024 (12) TMI 174 - AT - CustomsClassification and reclassification of liquor under the Customs Tariff - wooden pallets - confiscation - penalty - HELD THAT - This is not a case of intentional misdeclaration of goods but an unintentional on the part of the person filing the Bill of Entry. Further the Section 149 of the Customs Act, 1962 provides for the amendment in documents after their presentation. The amendment sought by the appellant in the facts of the present case is justified and if such amendment are not allowed, Section 149 would loose its relevance and would become infructous and if such bona fide errors are not allowed to be amended, it is failed to understand as to what would be covered by the provisions of Section 149 of the Customs Act. Act provides for correction of such errors as may be seen from Section 149 of the Customs Act. It is on record that Appellant already had filed application for amendment in documents - In the present matter Since there was no fraudulent intention whatsoever and the appellant had made application for amendment to the Bill of Entry mentioning about the facts in its entirety, the said application for amendment should have been allowed by the proper officer in terms of the powers conferred on him. There was no warrant to hold the goods liable to confiscation and impose any penalty. In these circumstances, the impugned orders are unsustainable in law. There is no evidence to establish that the appellant had prior knowledge of the excess import of goods and also when there is no evidence to establish any wrongful intent on the part of the appellant, further appellant had already filed application for amendment of Bill of Entry, then there is no justification for confiscation of the imported goods and imposition of penalty in this matter. In the result, the impugned order upholding confiscation of 1329 cases imported vide Bill of Entry dtd. 09.06.2022 and 11 wooden pallets is liable to be set aside. In respect of 2328 cases, the case of the department is that during the search of warehouse/ store room of Appellant, 2049 cases of foreign brand liquor, beer etc., were found which included 729 cases of Beer which expired in January 2022 - HELD THAT - It is admitted by the Ld. Commissioner that on the basis of verification of stock summary provided by M/s BBLLP vis- -vis the stock found physically available in their warehouse/storeroom during the panchanma dtd. 28/29.06.2022, shortage of 511 cases of branded liquor, beer beverages was noticed and on the aforesaid shortage appellant also admittedly paid the duty amounting to Rs. 12,57,982/-. We find that provisions of confiscation of disputed goods applies only when goods have been concealed and have not been declared and not the entire quantity of goods. In such circumstances impugned order for confiscation of total 2328 cases of goods valued at Rs. 52,73,873/- and imposition of redemption fine of Rs. 8,00,000/- in lieu of confiscation is legally not correct and we hereby set aside the same. Demand on 511 cases found short - HELD THAT - The clandestine removal charges based on shortages in stock cannot be upheld in the absence of any other evidence brought on record by the Revenue showing such illegal activities on the part of an assessee. The said decisions stand followed by the Tribunal in many numbers of cases. Inasmuch as in the present case the entire case of the Revenue is based upon the shortages detected at the time of visit of the officers, without there being any other evidence, there are no reasons to uphold the demand. Shortage of 511 483 cases as allegedly cleared without bill - HELD THAT - It is evident that nowhere it is admitted by the partner of appellant that the said details related to removal of goods. Further, the said loose documents which were recovered were not put to test for ascertaining to the authorship of these documents. Moreover, these documents could not be proved with the corroborative evidences. The investigating authority failed to find out the author of said disputed documents. The details contained on the loose sheets are actually not comprehensible and, therefore, cannot be accepted as admissible piece of evidence. Moreover, none of the persons on whose statement reliance was placed by the department were admitted that the details mentioned in the said sheet are true - It is well settled that the allegation of clandestine removal is required to be discharged by the revenue by production of positive evidence. In the absence of the same such allegation cannot be upheld on the basis of assumptions and presumptions - there are no justifiable reasons to uphold the impugned order. 729 cases of Beer imported without payment of duty - HELD THAT - According to Rule 37 (2) of the said Rules, on failure to utilize or dispose off goods as provided, such goods shall be liable for payment of duty as if the goods have been removed to Domestic Tariff Area on the date of expiry of the said validity period under sub-rule (1). In the present matter there is no case of the department that the validity period of the Letter of Approval issued to the appellant has expired. Hence, demand of duty on 729 cases of beer is also not legally sustainable. The duty demand, confiscation of goods penalties imposed on the appellant firm and its partner and employee set aside - Appeals are allowed.
Issues Involved:
1. Confiscation of goods under Sections 111(l) and 111(m) of the Customs Act, 1962. 2. Confiscation of wooden pallets under Section 119 of the Customs Act, 1962. 3. Classification and reclassification of liquor under the Customs Tariff. 4. Demand and recovery of customs duty under Section 28(4) of the Customs Act, 1962. 5. Imposition of interest on demanded duty. 6. Imposition of penalties under Sections 112(a), 112(b), 114A, 114AA, and 117 of the Customs Act, 1962. 7. Enforcement of bond and encashment of security under SEZ Act, 2005. Issue-wise Detailed Analysis: 1. Confiscation of Goods: - The appellate tribunal examined the confiscation of 1329 cases of liquor under Sections 111(l) and 111(m) of the Customs Act, 1962. The tribunal found that the appellant had applied for an amendment to the Bill of Entry before the completion of the examination by the Directorate of Revenue Intelligence (DRI), indicating no fraudulent intent. The tribunal emphasized that Section 149 of the Customs Act allows for amendments in documents post-presentation, and the appellant's amendment request should have been granted. Consequently, the tribunal set aside the confiscation order, finding no evidence of intentional misdeclaration or fraudulent intent. 2. Confiscation of Wooden Pallets: - The tribunal did not find sufficient grounds to uphold the confiscation of 11 wooden pallets under Section 119 of the Customs Act, 1962, as the primary issue revolved around the liquor cases. The order of confiscation was set aside. 3. Classification and Reclassification of Liquor: - The tribunal addressed the issue of classification and reclassification of various types of liquor. It noted that the adjudicating authority failed to provide substantial evidence for reclassification. The tribunal emphasized the need for concrete evidence to support any changes in classification and found the reclassification efforts unjustified. 4. Demand and Recovery of Customs Duty: - The tribunal scrutinized the demand for customs duty amounting to Rs. 1,22,30,869/- on the alleged excess import of goods. It noted that the appellant had already paid duty on 511 cases due to admitted shortages. The tribunal found no evidence of clandestine removal or intent to evade duty, thus setting aside the demand for additional duty. 5. Imposition of Interest: - The tribunal held that interest on the demanded duty was not applicable, given the lack of evidence supporting the demand for additional duty. The tribunal emphasized that interest could not be imposed without a valid duty demand. 6. Imposition of Penalties: - The tribunal examined the imposition of penalties under various sections of the Customs Act. It found no basis for penalties under Sections 112(a), 112(b), 114A, 114AA, and 117, as there was no evidence of false declarations or fraudulent intent. The tribunal emphasized that penalties require concrete evidence of wrongdoing, which was absent in this case. 7. Enforcement of Bond and Encashment of Security: - The tribunal addressed the enforcement of the bond and encashment of security under the SEZ Act, 2005. It found no justification for enforcing the bond or encashing the security, as the appellant had complied with the relevant provisions and there was no evidence of non-compliance. Conclusion: The appellate tribunal set aside the orders for confiscation of goods, demand for additional duty, and imposition of penalties. The tribunal emphasized the importance of evidence in adjudication proceedings and found that the department failed to substantiate its claims with credible evidence. The appeals were allowed, providing consequential relief to the appellants as per law.
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