1997 (9) TMI 270 - AT - Customs

Summary

Issues Involved:
1. Imposition of Penalty and Confiscation of Goods
2. Misdeclaration of Goods
3. Responsibility and Involvement of Appellants
4. Analysis of Evidence and Legal Precedents

Issue-wise Detailed Analysis:

1. Imposition of Penalty and Confiscation of Goods:
The judgment addresses two appeals filed by M/s. Amba Woollen Mills and one by M/s. Shakti International against the orders of the Collector of Customs, Bombay. The Collector had imposed penalties and ordered the confiscation of goods, namely Polyester Fibre and Acrylic Fibre, under Section 111 of the Customs Act, 1962. The Collector did not grant an option for redemption to the importers. Specifically, penalties of Rs. 1,00,000/- each were imposed on M/s. Amba Woollen Mills and M/s. Shakti International, and Rs. 2,00,000/- on M/s. Kamal Silk Mills.

2. Misdeclaration of Goods:
The case originated from information received by the Directorate of Revenue Intelligence (DRI) that goods in six containers at Bombay contained items other than those declared. Upon examination, it was found that out of 235 bales, 157 contained Polyester Fibre, and the remaining 74 contained Acrylic Fibre. The declared value was Rs. 2,94,161/-, but the actual value was Rs. 5,77,007/-. The goods were seized under the belief that they were liable for confiscation due to misdeclaration regarding contents, weight, and value.

3. Responsibility and Involvement of Appellants:
M/s. Amba Woollen Mills argued that they had refused the goods and informed the suppliers, banks, and customs authorities. The indenting agent, M/s. Shakti International, arranged another buyer, M/s. Cambridge Woollen Mills, who filed the Bill of Entry. The appellants claimed no involvement with the goods or the misdeclaration. The Collector concluded that M/s. Amba Woollen Mills had arranged for the misdeclaration and the packing of containers to evade detection, without providing evidence to support this conclusion.

4. Analysis of Evidence and Legal Precedents:
The judgment criticizes the Collector for not addressing the arguments and evidence presented by the appellants, rendering the order non-speaking. The Collector's conclusion of connivance between the appellants and the suppliers was deemed unsubstantiated. The judgment references two precedents: Mehra Spinning Mills v. Collector of Customs and Uma Textiles v. Collector of Customs, where penalties were not imposed due to lack of evidence of manipulation or misdeclaration by the appellants. Based on these precedents and the facts, the judgment finds no basis for the penalties imposed on M/s. Amba Woollen Mills and M/s. Shakti International, and thus, sets aside the impugned orders, allowing the appeals.

Conclusion:
The judgment meticulously examines the facts, the involvement of the appellants, and the evidence (or lack thereof) presented by the Collector. It underscores the necessity for a speaking order and the importance of concrete evidence when imposing penalties for customs violations. The appeals by M/s. Amba Woollen Mills and M/s. Shakti International were allowed, and the penalties imposed were set aside.