2018 (3) TMI 362 - AT - Customs

Confiscation - penalty u/s 112 (a) of CA - wrong invoicing by the supplier - Held that - the airway bill does give correct number of pieces. It is also a fact that the consignment was subjected to open and examination at which time this discrepancy was not noticed. At the same time, an important aspect is that the appellant themselves came forward, after the goods had been cleared out of charge, to inform the customs authorities that they had in fact received excess quantity of goods. This attests to their bonafides. Jjustice should be accorded to the appellant by setting aside the order of confiscation as also setting aside the modified penalty amount of ₹ 25 lakhs imposed on the appellant. Appeal allowed - decided in favor of appellant.

Issues:
1. Correction of documents under Section 149 of the Customs Act, 1962.
2. Confiscation of excess quantity of goods.
3. Imposition of penalty under Section 112(a) / 114AA of the Customs Act.
4. Benefit of amendment under Section 149 of the Customs Act.
5. Differential duty liability with interest.

Correction of documents under Section 149 of the Customs Act, 1962:
The appellant filed a Bill of Entry for clearance of goods declared as 9200 pieces of mobile phones. Subsequently, it was discovered that the appellant had received 2800 phones in excess due to a mistake in the invoice by the foreign supplier. The appellant sought correction under Section 149 of the Customs Act. The Tribunal noted that the airway bill correctly reflected the actual quantity of phones. Despite the appellant's proactive disclosure of the excess quantity, the authorities did not allow the correction under Section 149. The Tribunal held that the appellant should have been granted the benefit of amendment under Section 149, given the circumstances. Consequently, the order of confiscation was set aside, and the penalty amount of ?25 lakhs imposed on the appellant was also revoked.

Confiscation of excess quantity of goods:
The Tribunal observed that the discrepancy in the quantity of goods arose due to an error in the invoice provided by the foreign supplier. Although the consignment underwent open examination where the error could have been detected, it went unnoticed. However, the appellant voluntarily informed the customs authorities about the excess quantity after the goods were cleared. The Tribunal acknowledged the appellant's good faith and held that confiscation of the excess quantity was unwarranted. Therefore, the Tribunal set aside the order of confiscation.

Imposition of penalty under Section 112(a) / 114AA of the Customs Act:
During the adjudication proceedings, a penalty of ?77 lakhs was imposed on the appellant under Section 112(a) / 114AA of the Customs Act. On appeal, the Commissioner (Appeals) upheld the penalty but reduced the amount to ?25 lakhs. The Tribunal, considering the appellant's cooperation and the supplier's invoicing error, set aside the modified penalty amount of ?25 lakhs imposed on the appellant. The Tribunal emphasized that justice should be accorded to the appellant in this matter.

Benefit of amendment under Section 149 of the Customs Act:
The Tribunal highlighted the provisions of Section 149 of the Customs Act, which allow for the correction of documents in cases of genuine mistakes. The appellant argued that the mistake in the quantity of goods was due to wrong invoicing by the supplier. Referring to a relevant public notice, the appellant contended that the correction should have been permitted under Section 149. The Tribunal agreed with the appellant's position and held that the benefit of amendment under Section 149 should have been granted in this case.

Differential duty liability with interest:
The Tribunal directed the appellant to pay the differential duty liability with interest in respect of the excess quantity of goods received. While setting aside the penalty and confiscation orders, the Tribunal emphasized the appellant's cooperation and the need to ensure justice in the matter. The appeal was allowed on the specified terms, providing relief to the appellant in light of the circumstances.

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