2019 (12) TMI 571 - AT - Customs

Misdeclaration of imported goods - readymade garments - Bills of Entry were assessed and during examination it was found that the appellants had imported goods in excess of what were declared in the Bills of Entry and other documents - benefit of N/N. 99/2011-CUS dated 09.11.2011 - HELD THAT - It is not in dispute and is evident from the records as well as the impugned order that the appellant had mis-declared the quantity of goods and had imported goods in excess of what was declared in the Bills of Entry and the other documents. Country of origin certificate from Bangladesh (SAFTA certificate) which would entitle them to import goods under an exemption also covered such quantity of the goods as was declared in their Bills of Entry. What is in violation of the Customs Act is only the excess quantity of the goods which have been imported by them without declaring in any of the documents. These goods are also not covered by the SAFTA certificate. Confiscation of goods - HELD THAT - A plain reading of section 111 (e) and (l) shows that these apply to such goods only which have been concealed and have not been declared and not the entire quantity of goods. In fact section 111(l) is very categorical that it applies to goods found in excess of what have been declared. Therefore, we find that excess goods are liable for confiscation and not the entire consignment imported by the appellant - the confiscation of the remaining goods is not supported by law and accordingly needs to be set aside. Benefit of Notification - HELD THAT - The denial of the exemption Notification for the entire quantity of goods when the bulk of the goods are already covered by the SAFTA certificate is not supported by any legal provision. Therefore, the demands need to be set aside. Redemption fine - penalty - HELD THAT - The amount of redemption fine imposed by the impugned order as well as the penalties imposed upon the appellants need to be proportionately reduced. Appeal allowed in part - part matter on remand to the original authority for the limited purpose of calculation of the amount of duty, fine and penalty.

Summary

Issues:
1. Confiscation of imported goods under Customs Act, 1962.
2. Imposition of redemption fine and penalties.
3. Applicability of South Asia Free Trade Agreement (SAFTA) exemption.
4. Correct interpretation of Section 111(e) and 111(l) of the Customs Act.

Analysis:
1. The appellants imported readymade garments from Bangladesh under the SAFTA exemption. However, discrepancies were found between the declared quantity in Bills of Entry and the actual imported quantity. The adjudicating authority confiscated the entire consignment under Sections 111(e) and 111(l) of the Customs Act, 1962, and imposed redemption fine, duty, and penalties.

2. The appellants argued that only the excess goods not covered by the SAFTA certificate should be subject to confiscation and duty. They contended that correctly declared goods should not be confiscated, and redemption fines and penalties should only apply to the excess quantity. The authorized representative for the department supported the impugned order.

3. The Tribunal observed that the Customs Act allows confiscation of goods not declared or in excess. The SAFTA certificate covered the declared quantity, making only the excess goods liable for confiscation. The Tribunal held that only the excess quantity of goods, such as additional trousers and shorts, should be confiscated, not the entire consignment. The denial of exemption for goods covered by the SAFTA certificate was deemed incorrect.

4. The Tribunal ruled that Section 111(e) and 111(l) of the Customs Act apply to concealed or undeclared goods, not the entire consignment. Therefore, only the excess goods, like extra T-shirts and shorts, were subject to confiscation. The remaining goods were not supported by law for confiscation. The demands for duty, fines, and penalties were set aside for the correctly declared goods covered by the SAFTA certificate.

5. The appeals were partly allowed, upholding confiscation of excess goods and duty on those items. The confiscation of the remaining goods was set aside. The redemption fine and penalties imposed were proportionately reduced. The matters were remanded for recalculation of duty, fine, and penalty by the original authority.