2013 (1) TMI 468 - AT - Customs

Confiscation Under section 111(m) of Custom Act., 2002 - Mis-declaration of the description of imported goods - Good quality paper declare as waste paper - Found during examination of goods Held that - The custom department accepted the goods to be waste paper inasmuch as the value of the goods was not changed. That being the case, the Custom department has accepted that the mis-declaration was of no consequence in evading customs duty. Neither is any case made out that such mis-declaration was for contravening any regulation on import of the impugned goods. Section 111(m) should in the normal course be invoked only in cases involving mis-declaration for evasion of customs duty or contravention of import policy. If such issues are not made out, the mis-declaration was of a trivial nature. Confiscation of the goods not maintainable. Consequently penalty imposed also is not maintainable - In favour of assessee

Summary

Issues: Mis-declaration of imported goods as waste paper, Confiscation of goods under Section 111(m) of Customs Act, 2002, Imposition of penalty on importer

In this case, the appellant, a manufacturer of paper, imported waste paper as raw material. Upon examination, it was found that the waste paper was stacked in front of the container, while good quality paper reels were hidden behind the bales. The Revenue alleged mis-declaration by the importer, confiscating the goods under Section 111(m) of the Customs Act, 2002, and imposing a fine of Rs. 6 lakhs. The appellant contended that the paper reels were considered waste paper due to core pipe damage, making them unfit for printing. They offered to shred the goods for use as raw material and provided an end-use certificate. The appellant cited Supreme Court decisions where mutilation offers were declined, leading to no confiscation or penalty. The Revenue argued that the systematic packing of paper rolls to hide good quality paper indicated intentional mis-declaration. They contended that the mis-declaration was significant, as the number of bales and reels did not match the declaration, showing an attempt to deceive. The Customs department usually relies on importer declarations, with verifications in only 5% of cases. The Tribunal noted that while mis-declaration was observed, the value of the goods remained unchanged, indicating no evasion of customs duty. As the mis-declaration did not contravene import regulations or aim to evade duty, the confiscation under Section 111(m) was deemed unjustified. The Tribunal held that the mis-declaration was of a trivial nature and set aside the order of confiscation and penalty, providing relief to the appellant.