2000 (4) TMI 617 - AT - Central Excise

Summary

Issues:
Challenge to imposition of redemption fine and penalty due to misdeclaration of imported goods.

Analysis:
The appellant contested the redemption fine and penalty imposed for misdeclaration of goods in the Bill of Entry and invoice. They argued that their overseas supplier mistakenly informed them about two machines instead of four, leading to the misdeclaration. The appellant filed a corrected Bill of Entry with evidence of four machines after realizing the error. The Customs House agent also filed based on the belief that only two machines were supplied. The Commissioner (Appeals) acknowledged the genuine mistake and reduced the redemption fine from Rs. 40,000 to Rs. 20,000.

The appellant's counsel relied on the Supreme Court judgment in Hindustan Steel Ltd. v. State of Orissa, stating that penalties should not be imposed for genuine mistakes made in good faith. Conversely, the Departmental Representative cited the case of Jain Exports Pvt. Ltd. v. U.O.I., highlighting that even genuine actions do not automatically warrant a waiver of redemption fines. The DR argued that once misdeclaration is proven under Section 111(m), confiscation is required, and fines can be up to 100% of the goods' market value.

After considering both arguments and reviewing the case details, the judge noted that the authorities accepted the appellant's genuine mistake. The judge emphasized that despite the error, had the excess quantity not been detected, the goods would have cleared. Following the precedent set by the Supreme Court in Jain Exports Pvt. Ltd., the judge decided to reduce the redemption fine to Rs. 10,000 and the penalty to Rs. 1,000, acknowledging the appellant's genuine error. The judge ordered the reduction based on the plea of genuineness accepted by the lower authorities.