2009 (1) TMI 582 - AT - Customs

Summary

Issues:
1. Misdeclaration of grade of imported Mulberry Raw Silk.
2. Levying of anti-dumping duty.
3. Confiscation of goods and imposition of penalty under Customs Act, 1962.

Analysis:

Issue 1: Misdeclaration of grade of imported Mulberry Raw Silk
The appellants filed a bill of entry for clearance of Mulberry Raw Silk of Chinese origin, declaring it to be of 3A Grade based on CIQ Certificates. However, the Central Silk Board conducted tests and reported that the imported goods were actually of 2A Grade, subjecting them to anti-dumping duty. The Commissioner upheld the charges of misdeclaration, leading to the issuance of a show-cause notice proposing duty levy, confiscation, and penalty under the Customs Act, 1962.

Issue 2: Levying of anti-dumping duty
The Central Silk Board's initial test report indicated that the imported Mulberry Raw Silk was of 2A Grade, triggering the imposition of anti-dumping duty. However, a second test was conducted, following proper sampling procedures, which confirmed that the goods were indeed of 3A Grade as declared by the importers. The Tribunal held that the second test report should be accepted, concluding that anti-dumping duty was not applicable to the goods in question.

Issue 3: Confiscation of goods and imposition of penalty under Customs Act, 1962
Based on the misdeclaration of the grade of Mulberry Raw Silk, the Commissioner ordered confiscation of the goods with an option for redemption upon payment of a fine and imposed a penalty on the importers. However, upon determining that the goods were actually of 3A Grade, the Tribunal set aside the impugned order, ruling in favor of the appellants and allowing the appeal against the confiscation and penalty.

In conclusion, the Tribunal's decision was based on the acceptance of the second test report confirming the grade of the imported Mulberry Raw Silk as 3A Grade, thereby negating the applicability of anti-dumping duty. The judgment highlights the importance of accurate declaration in customs matters and the significance of proper testing procedures in determining the classification and duty liability of imported goods.