2013 (11) TMI 1041 - AT - Customs

Classification of goods - Mis declaration of goods - Confiscation of goods - Held that - From the uncontroverted evidence of shipment of virgin acrylic staple fibre by exporter and subsequent manipulation made to the documents in transit at the behest of the importer, it is established that the appellant importer mis-declared the imported goods in the bill of entry as waste to get the duty free benefit by the notification aforesaid. That is corroborated from the test reports of CRCL New Delhi & IPCL Baroda. Examination of the goods stuffed in container no. SXSU 232477/0 revealed that all the 24 bales packed in the container were with manufacturer s labels indicating that the goods were acrylic staple fibre commercial quality of denier of 2.5 and 3 and fibre length of 110 mm. Fraudulent act of manipulation of the description of the goods in transit by the appellant importer and persons connected thereto resulted in deliberate mis-declaration of the description and value of the goods imported. Duty exemption was availed under Notification No. 117/88 unlawfully when that was not due to the appellant. The fraud so committed against Revenue proved oblique motive of the appellant. Enquiry conducted with M/s World Wide Cargo and M/s CMA UK Agents established that Bill of lading No. BCM/001758 was issued by CMA s agent in Barcelona on the basis of instructions received from the booking and freight forwarding company and the description of the cargo was declared as Acrylic Staple Fibre , Commercial Quality BRIGHT and the cargo was shipped from Barcelona and was routed through Dubai. Containers were stored in shipper s premises at Barcelona and freight was indicated as Collect . But the UK based Shipping Agent paid the freight to CMA s agent in Bradford. Investigation result revealed that M/s Linear Shipping Containers had amended the description on the Bill of Lading to read as Synthetic Waste/ Soft Quality with predominance of staple fibre with wide variation in denier and length and containing drawn and undrawn fibre . The real description of the goods Acrylic Staple Fibre Commercial Quality Bright was deliberately changed on the basis of the UK Shipper s instructions. Appellant followed dilatory tactics calling the experts for cross examination and ultimately did not yield any result out of that except embarrassing them putting irrelevant questions running into more than hundred. The appellant failed to prove that the exporter exported waste but not virgin goods. Neither process of examination carried out by testing experts was proved to be faulty nor the credibility of the test reports impeached. Textile expert revealed the technicalities of the goods. That remained unrebutted by the appellant. Malafide of the DRI Officers was all along been recited by the appellant without that being proved. Manipulation of the transit documents detected by the DRI with full proof could not be repelled by the appellant. Such self-speaking evidence brought out the ill design of the appellant. It acted to the detriment of the Revenue deliberately suppressing the material fact. Entire discussion and finding of the ld. Adjudicating authority brings out how he applied his mind proving that there was deliberate mis-declaration committing fraud against Revenue. Such reasoned and speaking order establishing deliberate mis-declaration should sustain - Appellant failed to gain any benefit from the citation made in view of Crystal laboratory test findings and fraud committed against Revenue in the manner aforesaid. As no fraud can occur without human intervention, the persons connected to the illicit import were rightly brought to fold of law for penal consequence of law - Decided against assessee.

Issues Involved:
1. Mis-declaration of imported goods.
2. Eligibility for duty-free clearance under Notification No. 117/88.
3. Validity of the test reports from IPCL and CRCL.
4. Liability for customs duty and penalties.
5. Allegations of manipulation and fraud in transit documents.
6. Role and penalties for the partners of the appellant firm.

Detailed Analysis:

1. Mis-declaration of Imported Goods:
The appellant filed a Bill of Entry for the clearance of goods described as "synthetic waste/soft quality with predominance of Acrylic staple fibre." However, upon investigation by the Directorate of Revenue Intelligence and subsequent testing by M/s Indian Petro Chemicals Ltd. (IPCL), it was revealed that the goods were actually "virgin acrylic staple fibre" rather than synthetic waste. The physical and chemical tests indicated that the samples had the characteristics of virgin acrylic fibre, which contradicted the declared description.

2. Eligibility for Duty-Free Clearance under Notification No. 117/88:
The appellant sought duty-free clearance under Notification No. 117/88, which was applicable for synthetic waste. However, since the goods were found to be virgin acrylic staple fibre, they did not qualify for the duty exemption. The tribunal concluded that the goods did not merit duty-free clearance under the said notification.

3. Validity of the Test Reports from IPCL and CRCL:
The test reports from IPCL, Baroda, and CRCL, New Delhi, were central to the case. Both reports confirmed that the goods were virgin acrylic fibre rather than waste. The appellant's contention that the tests were flawed was not supported by evidence. The tribunal upheld the validity of these reports, noting that the appellant failed to disprove the findings or the credibility of the testing process.

4. Liability for Customs Duty and Penalties:
The adjudicating authority confirmed the customs duty of Rs. 53,39,836.59 on the imported goods and imposed a fine of Rs. 5,00,000 in lieu of confiscation. Additionally, penalties were levied on the appellant firm and its partners under Section 112(a) of the Customs Act, 1962. The tribunal found that the appellant's actions amounted to deliberate mis-declaration and upheld the penalties imposed.

5. Allegations of Manipulation and Fraud in Transit Documents:
The investigation revealed that the description of the goods was manipulated during transit. The original Bill of Lading described the goods as "Acrylic Staple Fibre Commercial Quality Bright," which was later changed to "Synthetic Waste/Soft Quality" based on instructions from the UK shipper. This manipulation was corroborated by evidence from cargo handlers and shipping agents. The tribunal concluded that the appellant had engaged in fraudulent activities to evade customs duty.

6. Role and Penalties for the Partners of the Appellant Firm:
The partners of the appellant firm were found to be involved in the mis-declaration and manipulation of documents. Penalties of Rs. 1,00,000 each were imposed on the partners under Section 112(a) of the Customs Act, 1962. The tribunal upheld these penalties, noting that the partners were knowingly and willfully involved in the fraudulent activities.

Conclusion:
The tribunal dismissed the appeals, confirming the customs duty, fines, and penalties imposed by the adjudicating authority. The tribunal emphasized that fraud unravels all and that the appellant's deliberate mis-declaration and manipulation of documents constituted a serious offense against the Revenue. The findings and conclusions were based on substantial evidence, including test reports and investigation results, which proved the appellant's fraudulent intent and actions.

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