1993 (9) TMI 232 - AT - Customs

Summary

Issues Involved:
1. Jurisdiction for confiscation and imposition of penalty.
2. Bona fide nature of the shipment.
3. Applicability of Section 111(d), (f), and (g) of the Customs Act.
4. Quantum of redemption fine.
5. Jurisdiction of the Collector to impose penalty on a foreign entity.

Summary:

1. Jurisdiction for Confiscation and Imposition of Penalty:
The appellants argued that there was no actual import into India, and hence, confiscation and penalty were without jurisdiction. They contended that the goods were in transit and not meant for discharge at Bombay. The Tribunal rejected this argument, noting that the goods were manifested for Bombay, and any revision of the shipping contract without Customs clearance was not binding. The Tribunal held that the goods were rightly confiscated as they were imported into India.

2. Bona Fide Nature of the Shipment:
The appellants claimed a bona fide mistake, stating they shipped Poly Vinyl Alcohol (P.V.A.) instead of Sodium Tripoly Phosphate (S.T.P.P.). The Tribunal found this explanation unconvincing due to the lack of supporting documents and the inconsistent explanations provided by the appellants. The Tribunal concluded that the shipment was not bona fide and was part of a deliberate attempt to misdeclare the goods to evade customs duty.

3. Applicability of Section 111(d), (f), and (g) of the Customs Act:
The Tribunal upheld the confiscation under Section 111(d) and (f) but not under Section 111(g). Section 111(d) was applicable because the goods were misdeclared and attempted to be imported against a duty-free license. Section 111(f) was applicable as the goods were not manifested correctly, and the deletion of the entry in the manifest was an attempt to thwart the ongoing investigation. Section 111(g) was not applicable as the goods were offloaded under the direction of Customs.

4. Quantum of Redemption Fine:
The Tribunal agreed that the fine should not be punitive but should be deterrent. The fine was reduced from Rs. 1 crore to Rs. 47 lakhs, considering the lack of bona fides in the shipment and the need for a realistic offer for redemption.

5. Jurisdiction of the Collector to Impose Penalty on a Foreign Entity:
The Tribunal discussed the jurisdiction issue extensively. One member opined that the Customs Act extends to the whole of India and can apply to foreign entities if their actions result in confiscation of goods in India. However, the Tribunal ultimately decided to remit the penalty on the appellants, noting that the Department had not fully investigated the involvement of the Indian consignee, M/s. U.K. Paint Industries.

Conclusion:
The Tribunal upheld the confiscation of the goods and allowed redemption on payment of a reduced fine of Rs. 47 lakhs. The penalty imposed on the appellants was remitted.