CUSTOMS APPEAL NO. 51251 OF 2022
[Arising out of Order in Appeal No. CC(A) CUS/D-II/ICD (TKD)
Import/3059/2018 dated 07.12.2018 passed by the Commissioner of
Customs (Appeals) New Customs House, New Delhi
S B INTERNATIONAL ……APPELLANT
VERSUS
COMMISSIONER, CUSTOMS-NEW DELHI(ICD
TKD)
……RESPONDENT
Appearance:
Present for the Appellant : Ms. Jyoti Sharma, Advocate
Present for the Respondent: Shri Girijesh Kumar, Authorised Representative
CORAM:
HON’BLE MS. BINU TAMTA, MEMBER (JUDICIAL)
HON’BLE MS. HEMAMBIKA R. PRIYA, MEMBER ( TECHNICAL )
FINAL ORDER NO. 50096 /2025
Date of Hearing : 20/01/2025
Date of Decision : 28/01/2025
BINU TAMTA:
1. The present appeal has been filed challenging the order in
appeal no. CC(A) CUS/D-II/ICD (TKD) Import/3059/2018 dated
07.12.2018 passed by the Commissioner of Customs (Appeals),
whereby the Commissioner (Appeals) confirmed the differential
duty, confiscation and imposition of redemption fine and penalty
under the provisions of the Customs Act, 19621.
2. On the basis of intelligence gathered by SIIB officer of
ICD(Import) TKD, New Delhi that the goods imported by M/s SB
International under the Bill of Entry2 No. 4877899 dated
12.04.2016 and 4877899 dated 12.04.2016 were mis-declared.
Container No. 2153470 and 2158234 were examined and the
goods were found to be “zinc ingots” bearing the mark “calcimin
zinc” contrary to the declaration that the goods were “lead
ingots”. The goods imported under the two BEs were seized
under section 110 of the Act due to mis-declaration as “zinc
ingots” instead of “lead ingots”. During the course of the
investigation, statement of Shri Premji Bhanusali, Proprietor of
M/s S.B. International was recorded on 06.05.2016 under section
108 of the Act, wherein he stated that the order was for import of
lead ingots only. However, due to mistake of the foreign
supplier, zinc ingots were found in the consignments. He also
brought to the knowledge of the department, letter dated
03.05.2016 received from M/s Metalia International Trading FZE,
UAE, wherein the supplier admitted his mistake and he,
therefore, requested for taking a lenient view as he was incurring
demurrage and detention charges, and on that account had
submitted that he is ready to pay the fine and penalty.
3. On adjudication, Joint Commissioner of Customs, ICD TKD
vide order dated 30.05.2016 re-determined the declared value of
Rs. 63,30,882/- in respect of BE No. 4861044 as Rs. 65,53,290/-
and the declared value of Rs. 32,59,224/- in respect of BE No.
4877899 as Rs. 34,89,904/- and, accordingly, confirmed the
demand of differential duty of Rs. 64,040/- under section 128 (i)
of the Act and held that the goods are liable to confiscation with
redemption fine of Rs. 5,00,000/- and penalty under section 112
(a) of the Act. The appeal filed by the appellant has been
rejected by the impugned order, hence the present appeal before
this Tribunal.
4. We have heard Shri Jyoti Sharma, learned counsel for the
appellant and Shri Girijesh Kumar, learned authorized
representative appearing for the department and perused the
records.
5. The learned Counsel for the appellant relying on the letter
dated 3.05.2016 received from the foreign supplier admitting
that mis-declaration was on their part, submitted that there was
no mistake on the part of the appellant and therefore confiscation
of the goods and imposition of such heavy redemption fine is
patently wrong and unsustainable. She also challenged the
imposition of penalty under section 112 as mis-declaration of
goods was neither intentional nor was on account of the appellant
who has filed the BE on the basis of import documents provided
by the foreign supplier. She also referred that the goods were
found to have pasted slips, showing “zinc”, which clearly implied
that the appellant had no intention to mis-declare the description
of the goods.
6. The learned authorized representative contested the
appeal, basically referring to the statement of Shri Premji
Bhanusali where he admitted that the goods were declared as
“lead ingots” instead of “zinc ingots” and thereby there was
violation of section 46 (4)of the Act. According to him, since the
appellant admitted the mistake and expressed readiness to pay
the fine and penalty, the same indicates acknowledgement of
violation of the provisions of the Customs Act. He also submitted
that despite the absence of intent to evade customs duty, the
declaration constituted a breach of regulations.
7. Since the learned authorized representative has placed
much reliance on the admission of Shri Premji Bhanushali
recorded under section 108 of the Act, we may first consider the
same. No doubt, the proprietor had admitted that the goods
declared were “lead ingots”, whereas the goods imported were
actually “zinc ingots”, however, he claimed it as a mistake and
for which he was sorry. He requested the department to take a
lenient view to release the goods on payment of fine and penalty
since he was incurring heavy demurrage charges and there was
no evasion of customs duty. He actually stated that it was a
bonafide mistake and therefore he was ready to pay fine and
penalty. During the course of his statement, he produced a letter
dated 3.05.2016 received from the foreign supplier, M/s Metalia
International Trading FZE, U.A.E. wherein it was acknowledged
that they shipped “zinc ingots” instead of “lead ingots” and
raised invoice of “lead ingots” due to mistake of their trainee
staff. Further, in support of his statement, he produced the
written contracts of the previous consignments imported by him.
Thus, what we find is, that the „admission‟ by the proprietor as
interpreted by the revenue is not correct. The proprietor of the
appellant had pleaded that it was a case of a bonafide mistake on
the part of the foreign supplier and there was no evasion of duty.
In view thereof he requested for release of the goods on payment
of fine and penalty so as to avoid the further liability of heavy
demurrage charges. The admission is not of any guilt on the part
of the importer. It is not a case of malafide intention to evade
duty or import goods which are prohibited as both “lead ingots”
and “zinc ingots” were freely importable items. Moreover, there
was not much difference in the price of the two products rather
as per the supplier, the lead ingots were more expensive than
zinc ingots and even the rate of duty of the two items is also the
same and hence the appellant would not have really gained any
monetary benefit by resorting to mis-declaration. At the most the
appellant can be said to have made an incorrect declaration
which can be termed as a bonafide mistake on the part of the
foreign supplier for which neither confiscation can be directed nor
penalty can be imposed.
8. In fact the adjudicating authority had categorically
recorded the finding that there was no intent to evade customs
duty behind the mis-declaration and the reason behind the same
was that though the goods were found to be mis-declared as
“lead ingots”, whereas actually the imported goods were “zinc
ingots”, however, it has been ascertained that the “lead ingots”
are expensive than the “zinc ingots” and so the importer had to
pay more customs duty than the duty payable for “zinc
ingots”. Surprisingly, the adjudicating authority having accepted
the contention of the importer that it was a bonafide mistake of
the supplier that they have dispatched the goods by mistake,
since the importer does not appear to gain much by way of misdeclaration of the description since rate of duty on the two items
is also same, ordered for confiscation with redemption fine and
penalty. In view of the peculiar facts of the present case, neither
confiscation nor imposition of redemption fine and penalty is
justifiable and therefore the same needs to be set aside.
9. In this regard, the learned Counsel for the appellant has
referred to the decision in Suzuki Powertrain India Ltd vs.
Commissioner of Customs (Exports), New Delhi3 where the
Tribunal held that in case of bonafide mistake by foreign supplier,
neither confiscation can be directed nor penalty can be imposed.
Similarly, in the case of Sorento Granito Pvt. Ltd vs.
Commissioner of Customs, Visakhapatnam4
where also the overseas supplier had inadvertently shipped the consignment of
single feeder along with the consignment of hydraulic press to
Visakhapatnam Port, instead of Mundra Port and the Tribunal
held that there is absolutely no malafide intention and therefore
set aside the confiscation, redemption fine and also the penalty
imposed. In Handtex vs. Commissioner Customs, Raigarh5
with reference to mis-declaration in the valuation of the goods, it
was observed that:
“7…………………….. Every change made by the assessing
officer during the course of assessment whether relating
to rate of duty or value need not lead to an inference of
mis-declaration by the importer. If a person receives a
consignment as a gift, the transaction value is nil but
the same requires to be valued for the purpose of
levying Customs Duty. Fixation of value or
enhancement of value for assessment purpose cannot in
every case lead to an inference of mis-declaration of
value in the absence of any evidence to that effect.
Therefore, we are unable to accept the charge of misdeclaration and consequent confiscation and imposition
of penalty.”
10. The redemption fine of ₹5 lakhs imposed by the
adjudicating authority is absolutely unsustainable not only on the
ground that it is highly exorbitant with reference to the
differential duty determined but also on account of our findings
that order of confiscation itself is not maintainable. We, therefore
set aside the redemption fine imposed on the appellant.
11. Since it is not a case of mis-declaration, but only a mistake
of making an incorrect declaration and that too by the foreign
supplier, the appellant cannot be saddled with the liability of penalty under the provisions of the Customs Act. Hence the
penalty imposed under Section 112(a) of the Act is hereby set
aside.
12. We therefore do not find any merit in the impugned order
and the same deserves to be set aside. The appeal is, accordingly
allowed.
[Order pronounced on 28.01.2025 ]
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