2002 (11) TMI 555 - AT - Customs

Summary

Issues:
1. Allegation of non-payment of customs duty on imported drawings and designs.
2. Allegation of misstatement and suppression by the appellant.
3. Applicability of customs duty on the imported drawings and designs.
4. Imposition of penalty under Section 114A of the Customs Act.

Detailed Analysis:
1. The appeal stemmed from an Order-in-Original passed by the Commissioner of Customs, Chennai, alleging that the appellant failed to pay customs duty on imported drawings and designs received under an agreement with a foreign designer. The agreement included various services related to interior design, and the appellant imported drawings without declaring their value for customs duty assessment.

2. The appellant denied the allegations of misstatement and suppression, claiming they cooperated by depositing an amount towards duty payment to demonstrate good faith. However, the Commissioner rejected their plea, citing the terms of the agreement and admissions made by the appellant, including the statement of the Financial Controller confirming receipt of drawings and designs.

3. The legal counsel for the appellant argued that the items should not be classified as "designs and drawings" for customs duty purposes. They contended that there was no intention to suppress facts and questioned the imposition of penalties. The Commissioner upheld the duty demands, considering the items as "drawings and designs" subject to customs duty under the relevant tariff heading.

4. The appellate tribunal analyzed the submissions and evidence presented. They noted that the drawings and designs were essential for interior decoration, as admitted by the appellant. Referring to legal precedents, including an Apex Court judgment, the tribunal affirmed that such intellectual property imports are subject to customs duty. Despite the appellant's deposit to show good faith, the tribunal rejected their pleas and confirmed the duty amounts assessed on the imported items.

5. Regarding the penalty under Section 114A of the Customs Act, the tribunal observed that the imports predated the promulgation of the section, rendering the penalty inapplicable. Citing legal judgments, the tribunal set aside the penalty imposed by the Commissioner. Consequently, the impugned order was modified to reflect the tribunal's findings, and the appeal was disposed of accordingly.