2022 (4) TMI 144 - AT - Customs

Levy of penalty u/s 112(a) of Customs Act - deliberate mis-declaration on the part of the Appellant or not - Appellant have abandoned the goods in view of the mistaken packing committed by the Shipper - HELD THAT - There is no case of deliberate mis-declaration made out on the part of the Appellant importer. The Bill of Entry had been filed as per the packing list and Bill of Lading. Further, the Shipper/Exporter have accepted their mistake, there being error at the time of packing the goods at their end. This cogent explanation has not been found to be untrue. It is further noted that the Appellant had already been suffered financial loss at the end paid for the consignment to the Shipper. The penalty imposed under Section 112a of the Act is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Valuation of imported goods
2. Allegation of mis-declaration
3. Confiscation of goods
4. Imposition of penalty

Valuation of imported goods:
The appellant, an importer/trader, filed a Bill of Entry declaring goods for telecommunication, including unbranded travel chargers and pouches. However, upon examination, discrepancies were found, such as the presence of branded Nokia chargers and undeclared items. The revenue authorities issued a show-cause notice to re-value the goods at a higher amount, alleging a mismatch in quantity and description. The appellant contested the charges, attributing the discrepancies to the shipper's mistake. The revenue authorities re-valued the goods, leading to confiscation of certain items and imposition of a penalty.

Allegation of mis-declaration:
The appellant denied deliberate mis-declaration, stating that the shipper mistakenly included branded Nokia goods not ordered by them. The appellant had requested leniency early on, as they had already paid for the consignment to the shipper. Despite the appellant's explanations and the shipper's admission of error, the revenue authorities imposed a penalty under Section 112a of the Customs Act. The appellant appealed, arguing that no deliberate mis-declaration occurred on their part.

Confiscation of goods:
The revenue authorities re-valued the goods, leading to the confiscation of items valued at a higher amount than initially declared. Additionally, branded Nokia chargers were confiscated as counterfeit goods. The appellant, facing financial losses due to detention and demurrage charges, eventually abandoned the goods. The Additional Commissioner ordered confiscation of certain goods and imposed penalties under relevant sections of the Customs Act.

Imposition of penalty:
The Commissioner (Appeals) upheld the penalty imposed on the appellant under Section 112a of the Customs Act, despite the appellant's arguments regarding the shipper's mistake and lack of deliberate mis-declaration. The appellant then appealed to the Tribunal, emphasizing the lack of intentional mis-declaration and the financial losses incurred due to the situation. The Tribunal, after considering the contentions, set aside the penalty, acknowledging the absence of deliberate mis-declaration by the appellant and the financial losses suffered. The appellant was granted relief in accordance with the law.

This detailed analysis of the judgment highlights the issues of valuation of imported goods, allegations of mis-declaration, confiscation of goods, and the imposition of penalties, providing a comprehensive overview of the legal proceedings and the final decision by the Tribunal.