2017 (4) TMI 421 - AT - Customs

Misdeclaration of quantity of goods in terms of weight - import of polyester fabrics - utilisation of Duty Free Replenishment Certificate (DFRC) licence for clearance despite clear ineligibility - Held that - the rival contentions revolve around the classification of the product. The claim of the importer that benefit of a split verdict should favor the assessee may be valid for invoking penal provisions but would be inappropriate where the dispute pertains to the levy of duty as prescribed by the law which brooks no such tolerance - the acceptance of the claim of irrelevance of weight in relation to assessment has also failed to address the issue of utilisation of a licence that was allegedly not permissible to be used for import of the impugned goods - Matter is remanded back to adjudicating authority to consider all the allegations in the notice and issue a fresh order - appeal allowed by way of remand.

Summary

Issues:
Appeal against dropping proceedings for misdeclaration of imported polyester fabrics.

Analysis:
The judgment addresses the appeal against the dropping of proceedings by the Commissioner of Customs (General), Mumbai concerning the misdeclaration of polyester fabrics imported by M/s Rotomac Exports Pvt Ltd. The goods were alleged to be manufactured from 'texturized yarn' instead of the declared 'non-texturized yarn,' leading to misdeclaration in terms of weight and utilization of Duty Free Replenishment Certificate (DFRC) license for clearance despite ineligibility. The weight discrepancies in the bills of entry, along with classification issues under the Customs Tariff Act, resulted in a duty liability totaling &8377; 1,02,86,893. The adjudicating authority found no conclusive evidence of misdeclaration of description warranting confiscation under the Customs Act, 1962, based on samples tested by the Textile Committee.

The judgment also delves into the misdeclaration of weight and the duty leviable at a specific rate related to linear measurement. The Revenue argued that the weight-to-area ratio was crucial for the imported item under the DFRC license, as the actual yield exceeded the permissible range. The Revenue contended that the adjudicating authority failed to consider crucial aspects, such as the license restrictions and the undeclared quantity of linear meters. The reliance on test reports and the discrepancy between different statutory bodies' opinions further complicated the matter.

The appellant cited various legal precedents, including decisions by the Hon'ble Supreme Court and High Courts, to support their case. The judgment emphasized the need for a thorough reconsideration of all allegations in the notice, highlighting the inadequacy in addressing critical issues and the utilization of an allegedly impermissible license for clearance. Consequently, the impugned order was set aside, and the matter was remanded back to the adjudicating authority for a fresh order covering all aspects. The judgment underscores the importance of a comprehensive review to ensure proper adjudication and resolution of the issues at hand.