2016 (4) TMI 880 - AT - Customs

Period of limitation - Imposition of redemption fine and penalty - Section 114AA of the Customs Act, 1962 - Misdeclaration of goods - Imported Tungsten Carbide Rods and Bits in the name of alloys steel melting scrap of mixed grade, seized and released provisionally - Held that - it is the case of mis-declaration and therefore the show cause notice can be issued within a period of five years from the date of findng mis-declaration by the investigating authority. Therefore, no reason to interfere with the impugned order which is found to be correct in the eye of law. - Decided against the appellant

Summary

Issues:
Confirmation of redemption fine and penalty under section 114AA of the Customs Act, 1962.

Analysis:
The case involved an appeal against the confirmation of a redemption fine of Rs. 8 lakh and a penalty of Rs. 10 lakh under section 114AA of the Customs Act, 1962. The appellant was found to have imported Tungsten Carbide Rods and Bits concealed in consignments of High Speed/Alloys Steel Melting Scrap from the USA and UAE, not declared in the import documents to evade customs duty. The Directorate of Revenue Intelligence (DRI) seized the goods and premises, leading to the recovery of concealed items and past consignment documents. A show cause notice was issued to demand duty, re-determine assessable value, and impose penalties. The appellant challenged the imposition of redemption fine and penalty, but the Commissioner (Appeals) reduced them. The appellant argued that the show cause notice was issued beyond the time limit prescribed under section 110 of the Customs Act, 1962, and that the extended period of limitation was not applicable. The appellant also contended that the seized goods should have been returned after six months if no show cause notice was issued within that time. However, the tribunal found that the appellant had concealed facts and mis-declared goods, justifying the extended period of limitation. Therefore, the tribunal upheld the imposition of redemption fine and penalty, dismissing the appeal.

The appellant's counsel argued that the goods were seized before the show cause notice was issued, and thus, the extended period of limitation should not apply. They relied on legal precedents to support their position. The counsel contended that the department was aware of the imported goods since a certain date and that the show cause notice should have been issued within one year. The counsel also highlighted discrepancies in the seizure of goods, suggesting that only specific items should have been confiscated, reducing the appellant's duty liability. However, the tribunal found that the appellant had indeed mis-declared the goods, justifying the extended period of limitation for issuing the show cause notice. The tribunal upheld the imposition of redemption fine and penalty based on the mis-declaration and concealment of facts by the appellant.

The tribunal considered the arguments presented by both parties and analyzed the facts of the case. It was established that the appellant had concealed the true nature of the imported goods, leading to the seizure and subsequent investigation by the authorities. The tribunal found no merit in the appellant's arguments regarding the time limit for issuing the show cause notice and the seizure of goods. Given the mis-declaration and concealment, the tribunal upheld the imposition of redemption fine and penalty, as confirmed by the Commissioner (Appeals). The tribunal concluded that the impugned order was legally sound and dismissed the appellant's appeal, affirming the redemption fine and penalty.

In conclusion, the tribunal upheld the confirmation of the redemption fine and penalty under section 114AA of the Customs Act, 1962, based on the appellant's mis-declaration and concealment of imported goods. The tribunal found no grounds to interfere with the impugned order, as it was deemed legally correct. The appeal filed by the appellant was dismissed, affirming the imposition of the redemption fine and penalty.