2018 (4) TMI 922 - AT - Customs

Penalty u/s 114(A) of the Customs Act, 1962 - case of the Department is that the appellants have wrongly claimed the exemption as the goods imported was not meant for manufacture of optical fiber cable - Held that - though the appellants have claimed the exemption Notification, but they have not mis-declared the description of the goods, the eligibility of the notification is based on interpretation, therefore, merely claiming the exemption notification does not amount to mis-declaration particularly when the goods were correctly declared. It cannot be said that the appellants had any mala fide intention of fraudulently claiming the benefit of exemption notification - it is a fit case for waiver of penalty imposed u/s 114(A) of the Customs Act, 1962. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against dismissal of appeal and upholding of penalty under Section 114(A) of the Customs Act, 1962 for wrongly claiming exemption for goods imported for manufacture of Optic Fiber Cables.

Analysis:
1. The appellant imported goods claiming exemption under Notification No. 24/2005-Cus for manufacturing Optic Fiber Cables. The Department alleged that the goods were not intended for this purpose, leading to the imposition of penalty under Section 114(A) of the Customs Act, 1962.

2. The appellant had obtained necessary certificates and bonds as per Customs Rules, binding them to pay any differential duty. The Department contended that misdeclaration occurred due to the wrongful claim of exemption.

3. The Assistant Commissioner argued that the appellant's claim amounted to misdeclaration, justifying the penalty. However, the appellant did not appear during the proceedings.

4. The Tribunal noted that while the appellant claimed the exemption, they did not misdeclare the goods' description. The eligibility for the exemption was subject to interpretation, and correctly declaring the goods did not constitute misdeclaration.

5. The Tribunal observed that the exemption notification required end-use certification, indicating the goods' specific purpose. It was concluded that there was no evidence of fraudulent intent or misuse of the imported raw material for purposes other than manufacturing optic fiber cables.

6. Considering the circumstances, the Tribunal found no mala fide intention on the appellant's part and deemed it a fit case for waiving the penalty under Section 114(A) of the Customs Act, 1962.

7. Consequently, the penalty imposed on the appellant was set aside, and the appeal was allowed, emphasizing the lack of fraudulent intent in claiming the exemption. The judgment was pronounced on 21.03.2018.