2019 (2) TMI 1572 - AT - Customs

Seizure and adjudication of the live consignment imported - mis-declaration the consignment imported - demand of duty of past consignments (import) also - Section 17 of the Customs Act - extended period u/s 28 of CA - Held that - It is not disputed that the Custom officer was in the process of examination of the container on 04.05.2013, after opening the container. Thereafter on receipt of the information that the DRI would be examining the consignment the container was sealed again. We find that for sealing of the container, there is no record. Ld. Advocate strenuously argued that the sealing of the consignment without punchnama was improper this ground itself is a sufficient to hold that there is a complete disregard to Customs Act and the Rules made thereunder. This in itself is a sufficient ground to treat the process of examination to be illegal and not permissible under Customs Act. The appellant has declared the description of the imported goods and their classification based on the documents supplied by the overseas supplier. The CHA, who was authorised to effect Customs clearance made available those documents, and was asked by the appellant to classify imported goods as per the aforesaid documents considering the nature and description of the goods. Therefore, if cannot be held that there was a deliberate attempt on their behalf to mis-declare the imported consignment. In fact, in past the Customs itself has cleared similar consignments as per the declaration given by the appellant at the strength of the export invoice as per the description of the goods therein. Revenue has not been able to prove that the appellant has paid any extra amount to the overseas buyer other than whatever is mentioned in the export invoice through banking channel. Regarding the consignment which has been imported by the appellant in past, it was argued that those imports have been under section 17 of the Customs Act without resorting to any provisional assessment. The Department has also not challenged the assessment order, and which had become final under Section 17 of the Act during the relevant period. The demand pertaining to past period is not sustainable. Also, the demand for the past clearance is proposed to be made against finally assessed bills of entry, which is not permissible. The invocation of Section 28 of Customs Act is not attracted as mis-declaration is not proved in these cases. Demand pertaining to live consignment - Held that - As far as demand pertaining to live consignment is concerned, the same has been accepted, we without going into further details uphold the same but without any penalty as there is no deliberate mis-declaration as part of the appellant. Penalty on Director of the Company - Held that - There is no deliberate attempt of mis-declaration on part of Director of the Company and the penalty imposed on them is set aside. The impugned order is set aside but for the demand relating to live consignment (B/E No. 2293952 Dated 31.05.2012) for differential value on account of change in classification of products - Interest and penalty imposed on the two appellants are also set aside - appeal disposed off.

Summary

Issues Involved:
1. Seizure and adjudication of the live consignment imported vide Bill of Entry No. 2293952 dated 31.05.2013.
2. Re-assessment and demand for past imports made under 18 Bills of Entry for the period 2011-13.

Issue-wise Detailed Analysis:

1. Seizure and Adjudication of the Live Consignment:
- The appeal arises from an Order-in-Original confirming the demand raised via a Show Cause Notice. The consignment of fabrics imported by the appellant was examined and re-examined by Customs and DRI officers. Samples drawn were tested at CRCL, revealing discrepancies in the declared and actual composition of the fabrics.
- Statements from the appellant's partner admitted to the discrepancies, but he claimed the mis-declaration was not intentional. The goods were declared based on documents from the exporter, and the appellant was unaware of the exact composition.
- The appellant argued that the examination and sealing of the container were improper, and no samples were provided to them, depriving them of the right to re-examine the goods.
- The adjudicating authority observed that the issue was not of mis-declaration of value but of the description and classification of goods, leading to a demand for differential duty. The appellant contested the imposition of penalty and confiscation, citing reliance on documents from the exporter and past clearance of similar consignments by Customs.
- The Tribunal found that the sealing of the container without a punchnama was improper and held that there was no deliberate mis-declaration by the appellant. The declaration was based on documents from the overseas supplier, and the appellant acted in good faith.
- The Tribunal set aside the confiscation and penalty, relying on precedents where declarations based on supplier documents were not considered deliberate mis-declaration.

2. Re-assessment and Demand for Past Imports:
- The department re-assessed past imports based on a report from the First Secretary (COIN) obtained from Chinese Customs, alleging undervaluation of goods.
- The appellant argued that the report was inconclusive, filled with contradictions, and not authenticated by Chinese authorities. The report was not provided to the appellant, and the cross-examination of relevant officers was denied.
- The Tribunal found that the report lacked evidentiary value and could not be relied upon for adjudication. The department failed to prove any extra remittance by the appellant to the supplier beyond the declared value.
- The Tribunal held that the demand for past imports was not sustainable as the assessments were final under Section 17 of the Customs Act and could not be re-opened without review. The invocation of Section 28 for extended period demand was not justified as mis-declaration was not proved.
- The Tribunal set aside the demand for past imports and penalties imposed on the appellant and its directors, citing lack of deliberate mis-declaration and procedural lapses by the department.

Conclusion:
- The Tribunal upheld the demand for the live consignment but without any penalty, acknowledging no deliberate mis-declaration by the appellant.
- The demand for past imports was set aside due to lack of conclusive evidence and procedural deficiencies.
- Penalties on the appellant and its directors were also set aside, emphasizing adherence to principles of natural justice and proper evidentiary standards.