2015 (11) TMI 549 - AT - Customs

Misdeclaration of goods - Penalty u/s 114AA - Confiscation of goods - Imposition of redemption fine - whether the case of the appellants that declaration in the B/E of a lesser quantity than the actual quantity imported, has happened only due to an inadvertent error, is believable or not - Held that - the quantity of the goods was wrongly stated. Mis-declaration involves an element of mens rea or intention to evade payment of duty by the party. Mis-declaration can occur due to human error also. In the instance case, the appellants have been able to explain the mis-declaration which reveals the nature of a wrong declaration, which was not deliberate. On coming to know the mistake they were able to explain the mistake. If the shipper made a mistake, the importer/CHA cannot be penalized for it. In the light of the above decision and the facts presented by this case, I hold that there was no wilful mis-statement on the part of M/s Bosch Chassis Ltd. The representatives of the CHA have merely relied on the invoice handed over by M/s Bosch Chassis Ltd./ Importer. The Commissioner (Appeals) have imposed penalty upon the representatives of CHA observing that they omitted to compare the invoices with purchase order and B/L. As there is no deliberate act or omission established, the imposition of penalty is unjustified. For these reasons penalty under Section 114A cannot be imposed. - penalty of ₹ 2,00,000/- imposed on M/s Bosch Chassis System India Ltd. under 114AA is therefore set aside as unsustainable. However, I uphold the order of confiscation of the goods as the quantity declared was different in the B/E and reduce the redemption fine - Decided partly in favour of assessee.

Summary

Issues: Mis-declaration of quantity of imported goods, imposition of penalties under Sections 114A and 114AA of the Customs Act, 1962, involvement of authorized representatives of the importer and CHA, challenge against the impugned orders.

Mis-declaration of Quantity of Imported Goods:
The case involved an allegation of mis-declaration of the quantity of goods imported by the appellants. The appellants had declared 40,000 meters of Hydraulic Oil Brake Hose in the Bill of Entry (B/E) while the actual quantity imported was found to be 90,000 meters. The discrepancy arose due to the shipper mistakenly scanning the same invoice twice instead of two separate invoices. The appellants, upon realizing the error, sought clarification from the supplier who acknowledged the mistake. The Bill of Lading correctly stated the quantity of goods imported, supporting the appellants' claim of inadvertent error by the shipper. The Tribunal found that the mis-declaration was not intentional, as evidenced by the immediate defense raised by the appellants and the supplier's acknowledgment of the mistake.

Imposition of Penalties under Sections 114A and 114AA:
The Customs authorities had imposed various penalties on the appellants and their authorized representatives under Sections 114A and 114AA of the Customs Act, 1962. The appellants contended that the penalties were unwarranted as there was no malafide intention or willful misrepresentation in declaring the incorrect quantity. The Tribunal noted that mis-declaration could also occur due to human error and that the appellants had provided a consistent explanation for the discrepancy. Relying on precedent, the Tribunal held that there was no willful mis-statement by the appellants and that the penalties imposed under Sections 114A and 114AA were unjustified. The penalties were set aside, and the order of confiscation of goods was upheld, albeit with a reduced redemption fine.

Involvement of Authorized Representatives of the Importer and CHA:
The authorized representatives of the importer and the Customs House Agent (CHA) were also implicated in the case. The Commissioner (Appeals) had imposed penalties on the representatives for allegedly omitting to compare the invoices with the purchase order and Bill of Lading. However, the Tribunal found that the representatives had merely relied on the information provided by the importer and that there was no deliberate act or omission on their part. Consequently, the imposition of penalties on the representatives was deemed unjustified, and the penalties under Section 114A were set aside.

Challenge against the Impugned Orders:
The appellants had challenged the impugned orders passed by the Commissioner (Appeals) upholding penalties and confiscation of goods. The Tribunal, after a detailed analysis of the facts and legal provisions, modified the impugned order to reduce the redemption fine and set aside the penalties imposed under Sections 114A and 114AA. The appeal filed by the importer was partly allowed, while the appeals filed by the authorized representatives were allowed, setting aside the penalties imposed on them.

This comprehensive analysis of the judgment highlights the key issues of mis-declaration of imported goods, imposition of penalties under relevant sections of the Customs Act, involvement of authorized representatives, and the outcome of the challenge against the impugned orders.