1995 (3) TMI 194 - AT - Customs

Summary

Issues Involved:
1. Mis-declaration of goods.
2. Liability of goods to confiscation under Section 111(m) of the Customs Act, 1962.
3. Applicability of redemption fine.
4. Imposition of penalty.

Issue-wise Detailed Analysis:

1. Mis-declaration of Goods:
The appellants imported certain goods and presented Bill of Entry No. 28500, dated 4-11-1993, declaring the goods as 3 Nos. of Fixed Winchester - 150 MEG and 3 Nos. of Streaming Tape Drive - 150 MEG. Upon physical examination, the goods were identified as 3 Nos. of Winchesters (XT-2190) with a capacity of 190 MB and 3 Nos. of Streaming Tape Drive (2150 L). The country of origin was declared as USA, but one Winchester and all Tape Drives were found to be of Singapore make. The appellants argued that the 190 MB capacity was unformatted, and when formatted, the usable capacity would be 150 MB. However, the Bill of Entry did not specify whether the capacity was formatted or unformatted. The department obtained an expert opinion indicating mis-declaration, which the appellants claimed was not disclosed to them. The Tribunal found the declaration in the Bill of Entry to be incorrect, thus establishing mis-declaration.

2. Liability of Goods to Confiscation under Section 111(m) of the Customs Act, 1962:
The Tribunal observed that the goods were declared as having a capacity of 150 MB, but upon examination, they were found to have a capacity of 190 MB. The country of origin was also incorrectly declared. The Tribunal concluded that these discrepancies amounted to a clear mis-declaration, contravening Section 46(4) of the Customs Act, 1962, making the goods liable to confiscation under Section 111(m).

3. Applicability of Redemption Fine:
The appellants contended that the goods were not liable to confiscation, and therefore, the question of redemption fine did not arise. However, the Tribunal upheld the lower authorities' decision, stating that the contravention of Section 46(4) justified the confiscation under Section 111(m). The Tribunal found no infirmity in the order passed by the lower authorities and saw no reason to interfere with the quantum of redemption fine.

4. Imposition of Penalty:
The appellants argued that there was no intention to evade duty, as the goods were imported to fulfill an export order under a duty exemption entitlement scheme. The Tribunal noted that the goods were needed for executing an export order and were not liable to duty. In the special circumstances of the case, the Tribunal held that mens rea was not proved, and the intention to evade duty was not clearly established. Consequently, the Tribunal reduced the penalty from Rs. 2.00 lakhs to Rs. 10,000/-, considering the imposition of the original penalty to be disproportionate.

Conclusion:
The Tribunal upheld the confiscation of goods and the application of redemption fine, but reduced the penalty imposed on the appellants. The appeal was disposed of with the modification of the penalty amount.