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TMI Blog2013 (12) TMI 1456X X X X Extracts X X X X X X X X Extracts X X X X ..... the testing authority confirmed that the goods were in the form of grey coloured moistened coarse powder and friable lumps and were composed of iron and its compounds 88.8% together with compounds of chromium, molybdenum, tungsten, silicon and oil matter along with cellulosic fibrous mass. Thus the goods were found to be misdeclared with respect to description and the correct classification being 7202 99 90 attracting basic customs duty 5%. In the absence of data regarding unit price of similar goods, value was re-determined under Rule 9 of the Customs Valuation Rules, 2007 on the basis of the composition of the impugned goods. The appellant waived the show cause notice and appeared for personal hearing and during the personal hearing they submitted that the mistake occurred due to miscommunication between the importer and the supplier. The case was adjudicated by the original adjudicating authority wherein he found that the importer had misdeclared the description as well as the value of the goods and, therefore, the goods are liable for confiscation under Section 111(m) of the Customs Act, 1962 and the importer was liable to penal action under Section 112(a) of the said Act. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and reclassification of the goods. This determination of duty and assessment was done under the provisions of Section 17 of the Customs Act, 1962. The proceedings herein is not one undertaken under Section 28 of the Customs Act where differential duty is demanded on account of short levy, non-levy or erroneous refund, etc. Section 28 operates in a different field altogether and demands under Section 28 are issued after the goods have been assessed duly and cleared from the customs area. In the case before us, the facts clearly show that it is not a demand under Section 28 but a reassessment under Section 17 after examination of the goods and re-determining the duty liability. Therefore, the provision of Section 28(1A) or the proviso thereto has no application whatsoever. Section 28(1A) reads as follows :- "(1A) When any duty has not been levied or has been short-levied or the interest has not been charged or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any wilful misstatement or suppression of facts by the importer or the exporter or the agent or employee of the importer or exporter, to whom a notice is served under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;In the instant case there is no dispute of the fact that the goods were misdeclared both in terms of description as well as in value. Therefore, the goods are liable to confiscation under Section 111(m) of the Customs Act. Once the goods are confiscated, as has been done in the instant case, the adjudicating authority has to give an option to the importer to redeem the goods under Section 125(1) of the Customs Act, which is what has been done. In addition to imposing a redemption fine under Section 125, the appellant is also liable to penalty under Section 112(a) of the Customs Act. If that be so, imposition of fine under Section 125(1) and imposition of penalty under Section 112(a) of the Customs Act cannot be challenged at all. The appellant has also not contested that the redemption fine imposed of Rs. 6,00,000/- in this case is excessive or the penalty of Rs. 3,00,000/- imposed under Section 112(a) is harsh. Their only plea is that inasmuch as they paid the duty, interest along with 25% of duty as penalty imposed, the proceedings should be closed. As discussed above, we find no merit in the said argument. 8. In view of the foregoing, we do not find any merit in the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 28(1A) can also be an oral show cause notice but held that in this case provisions of Section 28(1A) ibid are not applicable. As per the challans, through which the appellant made the payment of differential duty, along with interest and 25% of duty as penalty it is evident that the same has been paid under Section 28(1A) ibid. 13. For better appreciation, the challan is inserted as below : The challan dated 6-4-2011 has not been disputed which has been signed by the Asst. Commissioner of Customs, Bond Department, JCH, Sheva. 14. From the said challans, it is evident that the differential duty along with interest and 25% of differential duty as penalty has been accepted by the department under Section 28(1A) of the Customs Act, 1962. The same has not been disputed in the adjudication order as well as in the Order-in-Appeal. The Section 28(1A)(2) proviso provides that "if such person has paid the duty in full together with interest and penalty under sub-section (1A) the proceedings in respect of such person and other persons to whom notice is served under sub-section (1) shall, without prejudice to the provisions of Sections 135, 135A and 140, be deemed to be con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri materia and in the case of Sonam Clocks P. Ltd. vide order No. A/1962-1974/WZB/AHD/2011, dated 21-11-2011 this Tribunal has taken the same view. Therefore, as evident from the challans dated 6-4-2011, the payment have been accepted by the department under Section 28(1A) of the Customs Act, 1962. The appellants are entitled for immunity of rigours of adjudication procedure as per Section 28(1) of the Customs Act, 1962. 16. With these observations, I am of the view that the redemption fine of ` 6,00,000/- and penalty of ` 3,00,000/- under Section 112A of the Customs Act are not imposable on the appellant. Sd/- (Ashok Jindal) Member (Judicial) DIFFERENCE OF OPINION 17. As there is a difference of opinion between the Members, therefore, matter be placed before the Hon'ble President for appointing Third Member to decide the following issues : Whether in the facts and circumstances of the case, the provisions of Section 28(1A) of the Customs Act, 1962 are applicable or not? Sd/- (P.R. Chandrasekharan) Member (Technical) Sd/- (Ashok Jindal) Member (Judicial) 18. The following difference of opinion is referred to the Third Member. "Whether in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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