2020 (9) TMI 483 - AT - Customs

Confiscation - imposition of redemption fine and penalties - mis-declaration of imported goods - goods declared as Crystallised Glass Panel Grade B - test reports revealed that the goods were Agglomerated Marble and not Crystallised Glass Panel Grade B , as declared by the appellant - HELD THAT - In this case, the facts are not in dispute that the appellant had filed the Bills of Entry, declaring the description of goods as 'Crystallised Glass Panel Grade B', whereas as per the test report obtained by the department, the same were reported to be 'Agglomerated Marble'; that the value in respect of both the category of goods were also different. Thus, there was misdeclaration in respect of both description and value of goods. Further, the subject goods were also imported in violation of the provisions of Foreign Trade Policy. All these aspects of statutory contravention were admitted and accepted by the Proprietor of the appellant-importer in the statement recorded under summon in terms of Section 108 ibid. Hence, under the facts and circumstances of the case, it is evident that the penal consequences provided under Sections 111, 125(1), 112(a)(i) and 114AA ibid are attracted for confiscation of imported goods, imposition of redemption fine and penalties. It is found from the available records that though the importer-appellant had placed the purchase order for import of 'Crystallised Glass Panel, but the overseas supper had wrongly shipped different types of goods, the fact of which had also been acknowledged in the e-mail correspondence dated 09.12.2018. Further, the supplier had also expressed his willingness to take back the consignments as per the description provided in the Bills of Entry filed by the importer-appellant. However, it an admitted position that the importer-appellant did not take proper steps to check the cargo before presentation of the Bills of Entry for assessment purpose and accordingly, it cannot plead that the action on its part is entirely bonafide. The quantum of redemption fine and penalty imposed on the importer appellant can be reduced to meet the ends of justice. Accordingly, while upholding the impugned order on merits of the case, we reduce the redemption fine from ₹ 1,18,85,000/- to 18,00,000 - penalty imposed under Section 112 of Customs, Act, 1962 reduced from ₹ 7,50,000 to ₹ 2,50,000. Penalty under Section 114AA on Shri Sumeet Agarwal, proprietor of the importer-appellant - learned counsel argues that it is a settled principle of law that simultaneous penalties cannot be imposed on both - HELD THAT - What we have before us is the imposition of penalty on the company under Section 112(a) and imposition of Penalty on the proprietor under section 114AA, ibid. The facts of the case and issue dealt are different. However, looking in to the facts and circumstances of the case, penalty imposed on Shri Sumit Agarwal reduced to ₹ 1,00,000. Appeal allowed in part.

Summary

Issues: Mis-declaration of goods, violation of Foreign Trade Policy, imposition of redemption fine and penalties

Mis-declaration of Goods:
The case involved misdeclaration of goods by the appellant-importer, where goods declared as 'Crystallised Glass Panel Grade B' were found to be 'Agglomerated Marble' upon testing. The department initiated proceedings based on this misdeclaration, leading to confiscation of goods, redemption fine, and penalties. The appellant argued that the wrong consignment was shipped by the supplier, which was acknowledged by the supplier. However, it was admitted that the appellant did not verify the cargo before filing Bills of Entry. The Tribunal upheld the misdeclaration and statutory contravention, but focused on determining the quantum of penalties imposed.

Violation of Foreign Trade Policy:
The imported goods were found to be in violation of the Foreign Trade Policy due to misdeclaration and incorrect classification. The department issued a Show Cause Notice proposing change in classification, confiscation of goods, and imposition of fines and penalties. The adjudication order confirmed these proposals, leading to the imposition of redemption fine and penalties on the appellant-importer and its proprietor. The Tribunal considered the violation of the Foreign Trade Policy as a significant factor in determining the penalties.

Imposition of Redemption Fine and Penalties:
The adjudication order imposed a redemption fine of ?1,18,85,000 and penalties on the appellant-importer and its proprietor under various sections of the Customs Act, 1962. On appeal, the Commissioner of Customs (Appeals) upheld the demands but reduced the penalty imposed on the appellant-importer. The Tribunal, after considering the facts and circumstances, reduced the redemption fine to ?18,00,000 and the penalty under Section 112 to ?2,50,000. Additionally, the penalty imposed on the proprietor under Section 114AA was reduced to ?1,00,000 based on the specific circumstances of the case.

This judgment highlights the consequences of misdeclaration of goods, violation of trade policies, and the imposition of fines and penalties under the Customs Act. It emphasizes the importance of accurate declaration and compliance with trade regulations to avoid legal repercussions and financial liabilities.