2015 (9) TMI 1073 - AT - Customs

Excess Drawback Rebate Bona-fide Mistake Appellant claimed higher drawback amount under provision of notification 36/2005-Cus, as appellant had declared rate under column for no Cenvat credit whereas in other document he declared he used Cenvat credit Differential amount of said drawback was paid back by appellant However vide impugned order appellants goods were confiscated, redemption fines and penalties were imposed Held that - appellant admittedly paid back Drawback amount before issuance of show cause notice Appellant have correctly declared that they were availing facility of Cenvat credit This shows that it was case of bona fide mistake occurred in declaring Drawback under column A of Drawback Schedule, for this reason Section 113(ii) was not invokable Goods on which excess Drawback was sanctioned were exported and not available for confiscation Settled legal position that goods which were not physically available for confiscation redemption fine cannot be demanded Confiscation and redemption fines hereby set aside, however demand of differential amount of Drawback and interest thereupon maintained - Decided partially in favour of Assesse.

Summary

Issues:
1. Excess drawback claimed by the appellant.
2. Confiscation of goods and imposition of redemption fine and penalty.
3. Applicability of Sections 113(ii) and 114(iii) of the Customs Act, 1962.

Issue 1: Excess drawback claimed by the appellant:
The case involved a discrepancy where the appellant claimed and received a drawback at a higher rate under a customs notification, but it was later discovered that a lower rate should have been applicable due to availing Cenvat credit. The appellant voluntarily repaid the excess drawback before a show cause notice was issued. The Revenue then demanded the differential drawback amount, confirmed confiscation of goods, imposed a redemption fine, and a penalty. The appellant challenged these charges.

Issue 2: Confiscation of goods and imposition of redemption fine and penalty:
The appellant contested the confiscation of goods, redemption fine, and penalty imposed. The appellant argued that as the goods were not physically available for confiscation and were already exported, the redemption fine and confiscation were not justified. The appellant also contended that the penalty under Section 114(iii) of the Customs Act should not be imposed since the goods were not liable for confiscation under Section 113(ii).

Issue 3: Applicability of Sections 113(ii) and 114(iii) of the Customs Act, 1962:
The Tribunal analyzed the provisions of Sections 113(ii) and 114(iii) of the Customs Act. It was held that Section 113(ii) could only be invoked in cases where the fixation of drawback rate under Section 75 was involved. Since the appellant's case involved a bona fide mistake in declaring the drawback rate, Section 113(ii) was deemed inapplicable. Regarding the penalty under Section 114(iii), it was established that since the goods were not liable for confiscation under Section 113(ii), the penalty should not be imposed.

In the judgment, the Tribunal set aside the confiscation of goods, redemption fine, and penalty imposed on the appellant. However, the demand for the differential drawback amount and interest thereupon was maintained. The decision was based on the non-applicability of confiscation and penalties due to the goods being already exported and not physically available for confiscation. The Tribunal's ruling was in line with established legal principles and previous judicial precedents regarding the imposition of fines and penalties under the Customs Act.