2016 (5) TMI 1193 - AT - Customs

Confiscation in lieu of redemption fine and imposition of penalty - Section 114A of the Customs Act 1962 - Mis-declaration of description of imported goods - Zinc Ash as Zinc Dross - No intention to evade duty - Held that - the goods imported are Zinc Ash and not Zinc Dross. Therefore mis-declaration of the description of the goods and non-eligibility for import of the goods under the advance licence mentioned in the Bill of Entry is established. Therefore we do not find any reason to interfere with the impugned order of the Commissioner of Customs Kandla. However we do find that the Adjudicating authority has not extended the benefit of 25% penalty which the appellants are eligible for as per Section 114A of the Customs Act 1962. The Appellants are eligible for the same even at the appellate stage as per the decision of the Hon ble Gujrat High Court in the case of CCE Vs Harish Silk Mills 2010 (2) TMI 494 - GUJARAT HIGH COURT and CCE Vs G.P.Presstress Concrete Works 2012 (8) TMI 933 - GUJARAT HIGH COURT . We therefore extend the said benefit to the Appellants subject to fulfillment of conditions thereof. The impugned order is upheld with the above modification. - Decided partly in favour of appellant

Summary

Issues: Mis-declaration of imported goods as "Zinc Dross," imposition of penalty under Section 114A of Customs Act, 1962, eligibility for penalty waiver, benefit of 25% penalty.

In this case, the Appellants were accused of importing goods by mis-declaring "Zinc Ash" as "Zinc Dross." The Chemical Examiner confirmed the misdeclaration, leading to confiscation of goods valued at ?20,57,201.46 and imposition of duty and penalty under Section 114A of the Customs Act, 1962 by the Commissioner of Customs, Kandla. The Appellants admitted the error, paid the duty, and sought waiver of penalty. The Appellants argued no intention to evade duty as they believed they were importing Zinc Dross, not Zinc Ash. The Revenue contended that the Appellants knowingly imported Zinc Ash to evade duty, supported by a license from the Central Pollution Control Board. The Tribunal found the goods were indeed Zinc Ash, confirming mis-declaration and ineligibility for import under the license. While upholding the Commissioner's order, the Tribunal noted the Appellants' eligibility for a 25% penalty waiver under Section 114A, citing precedents from the Hon'ble Gujarat High Court. Consequently, the Tribunal allowed the appeal partially, extending the benefit of the penalty waiver to the Appellants.

This judgment primarily dealt with the mis-declaration of imported goods, the imposition of penalty under Section 114A of the Customs Act, 1962, the Appellants' claim of no intention to evade duty, and the eligibility for a 25% penalty waiver. The Tribunal affirmed the misdeclaration of goods as Zinc Ash instead of Zinc Dross, leading to the imposition of duty and penalty. However, the Tribunal recognized the Appellants' eligibility for a penalty waiver under Section 114A, citing relevant precedents from the Hon'ble Gujarat High Court. By extending the benefit of the penalty waiver to the Appellants, the Tribunal partially allowed the appeal, modifying the impugned order to include the penalty waiver.