2014 (5) TMI 633 - AT - Customs

Confiscation of goods - Mis declaration of goods - Penalty - Held that - As the goods are freely importable as per Import-Export Policy 2009. Therefore goods are not liable for confiscation under Section 111(d) of the Customs Act, 1962. Therefore, no penalty under Section 112 of the Customs Act is leviable - Decided against Revenue.

Summary

Issues:
Appeal against dropping penalty under Section 112 of the Customs Act.

Analysis:
1. Classification Issue: The case involved the misclassification of Fixed Wireless Terminals (FWT) by M/s. Reliance Communication Ltd., leading to the wrong application of Central Excise Notification No. 6/2006 Sr. No. 28 and cess vide Notification 69/2004 Sr. No. 1. The respondent declared the goods as FWT or cellular telephones to mislead the department, raising concerns about the need for a license for clearance under the Indian Wireless Telegraphy Act and Customs Act.

2. Confiscation and Penalty: The adjudicating authority found the goods liable for confiscation under Section 111(m) of the Customs Act due to misdeclaration and wrongful classification. However, the authority did not impose a penalty under Section 112 of the Customs Act. The Revenue appealed, arguing that the respondent violated the Indian Wireless Telegraphy Act and Customs Act, making them liable for penalty under Section 112.

3. Legal Interpretation: The impugned order highlighted the Import-Export Policy 2004-09, indicating restrictions on certain tariff items requiring licenses for import. However, the goods in question were freely importable under the policy. The adjudicating authority's decision not to confiscate the goods under Section 111(d) of the Customs Act was upheld, stating that the goods were not subject to confiscation as they were freely importable. Consequently, no penalty under Section 112 of the Customs Act was applicable, leading to the dismissal of the Revenue's appeal.

In conclusion, the Tribunal affirmed the adjudicating authority's decision, emphasizing that the goods were not liable for confiscation under Section 111(d) of the Customs Act due to being freely importable as per the Import-Export Policy 2009. Therefore, the penalty under Section 112 of the Customs Act was deemed inapplicable, resulting in the dismissal of the Revenue's appeal.