2018 (7) TMI 345 - AT - Customs

Smuggling - Karbonn Mobile - seizure was made prior to clearance - case of appellant is that the Revenue failed to discharge its burden of proof that the seized goods were in the process, to be illegally smuggled into Nepal - Held that - The provision of Foreign Trade Policy shall be read with the provisions of Indo Nepal Treaty and in case of any conflict, the provision of Indo Nepal Treaty shall prevail - It is seen from the impugned Order that there was a mis-declaration by the appellant no. 1 regarding the origin of the goods as well as that the goods have been manufactured by them, before the Customs authority. In any event, the appellant have not denied the mis-declaration of the goods. Therefore, confiscation of the Mobile consignment and imposition of redemption fine and penalty on the appellant no. 1 is justified - there is no reason to impose penalty on Shri Ram Bharosi Gupta, appellant no. 2 as Authorised Signatory of the appellant no. 1 company. Appeal allowed in part.

Summary

Issues: Mis-declaration of goods, application of Indo Nepal Treaty, confiscation of goods, imposition of penalty

Mis-declaration of Goods:
The case involved the seizure of Karbonn Mobile Phone sets and Tissue Papers by SSB Officers. The appellant claimed the goods were meant for export to Nepal under the Indo Nepal Treaty. The Revenue alleged mis-declaration as the goods were of Third Country origin, prohibited for export under the Treaty. The Adjudicating authority noted that the Exporter followed all customs formalities for export, leading to the dismissal of charges. However, the appellant did not dispute the mis-declaration, leading to the confiscation of the consignment by the Commissioner (Appeals).

Application of Indo Nepal Treaty:
The appellant argued that the goods were to be exported to Nepal under the provisions of the Indo Nepal Treaty, which prohibits re-exports of goods imported from Third Countries without manufacturing activity. The Adjudicating authority and the Commissioner (Appeals) differed in their interpretations of the Treaty. The Commissioner (Appeals) held that the mis-declaration by the appellant regarding the origin of the goods justified the confiscation and imposition of fines and penalties. The Tribunal agreed with the Commissioner (Appeals) that the Treaty prevails in case of any conflict with the Foreign Trade Policy.

Confiscation of Goods and Imposition of Penalty:
The Tribunal upheld the confiscation of the Mobile consignment and the imposition of redemption fine and penalties on the appellants. It was noted that the appellant did not deny the mis-declaration, justifying the actions taken by the Commissioner (Appeals). However, the penalty imposed on the second appellant, as the authorized signatory, was set aside considering the overall circumstances of the case.

This judgment highlights the importance of accurate declaration of goods for export, the application of international treaties in trade matters, and the consequences of mis-declaration in customs procedures. The decision emphasizes the significance of complying with customs regulations and the implications of failing to do so, leading to confiscation and penalties.