2015 (11) TMI 945 - AT - Customs

Demand of differential duty - Misdeclaration of goods - Confiscation of goods - Imposition of penalty - Held that - when the goods were duly cleared by customs after proper examination and after finding them to be not mis-declared, the respondent cannot be held liable to the differential duty on the ground that the goods were defective/secondary tin plate sheets/ coils merely on the basis of the statement of a third party when that party did not object at the time of receipt of goods from the suppliers that the goods were not prime material l. Also there is no unbroken link between the goods seized and the goods imported under the said three Bills of Entry dated 18.10.2005 in-as-much-as the goods were first sold by the respondent to M/s. Mayank Containers who also used to obtain goods from other suppliers and M/s. Mayank Containers in turn supplied the goods to M/s. Saksham Containers Pvt. Ltd. Not even an iota of evidence exists to show that the goods seized were necessarily out of the goods imported vide the said three Bills of Entry under which the total quantity imported was 169.92 MT., while the purchase as per M/s. Mayank Containers Pvt. Ltd. from the supplier respondent was to the tune of more than 200 MT. - adjudicating authority came to the correct conclusion that the investigation has failed to establish the relationship of the seized goods with the goods imported vide three Bills of Entry dated 18.10.2005 and has therefore rightly dropped the proceedings - Decided against Revenue.

Summary

Issues:
1. Mis-declaration of imported goods as prime materials.
2. Seizure of secondary tin plate sheets/coils.
3. Allegations of evasion of customs duty and circumvention of port restrictions.
4. Adjudication of proceedings under Show Cause Notice.

Analysis:
1. The case involved the mis-declaration of imported goods as prime tin plates/coils, attracting a higher basic duty rate. The original Order-in-Original quashed proceedings under a Show Cause Notice demanding differential duty, confiscation, and penalties. The respondent imported goods declared as prime tin plates/coils but were found to be secondary tin plate sheets/coils upon examination, leading to the dispute.

2. Following the detection of mis-declaration, investigations revealed stock discrepancies at various premises, with 78.100 MT of secondary tin sheets/coils seized at a job worker's premises. The primary adjudicating authority dropped proceedings based on evidence evaluation, emphasizing the lack of conclusive proof linking the seized goods to the mis-declared imports.

3. The Revenue appealed, citing specific grounds, including the seizure being based on intelligence, statements from involved parties, and discrepancies in declared values. However, the respondent argued that the goods were correctly declared, cleared by customs after examination, and sold to various buyers, making it challenging to establish a direct link to the mis-declared imports.

4. The appellate tribunal analyzed the contentions from both sides, emphasizing the proper clearance of goods post-examination and the lack of concrete evidence linking the seized goods to the mis-declared imports. The tribunal upheld the dropping of proceedings, noting the absence of a clear connection between the seized goods and the imports, ultimately dismissing the Revenue's appeal due to the lack of merit in establishing the relationship between the goods involved.

In conclusion, the judgment focused on the crucial aspect of establishing a direct link between the seized goods and the mis-declared imports, highlighting the importance of concrete evidence and clear documentation in customs disputes to determine liability accurately.