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2008 (7) TMI 837 - AT - Customs
Confiscation of goods - Non-fulfilment of condition of notification - Exemption under Notification No. 5/2006-C.E. - Retail sale price embossed on cartons containing footwear as well as on footwears
Issues:
- Import of footwear under concessional rate of countervailing duty
- Requirement of indelible marking of retail sale price (RSP) on footwear
- Show Cause Notice proposing penalty under Section 112(a) of the Act
- Appeal challenging penalty imposition of Rs. 10,000
Analysis:
1. The case involved the import of three consignments of footwear by M/s. Bata India Ltd. seeking clearance under a concessional rate of countervailing duty at 8% under Notification No. 5/2006-C.E. The exemption was applicable to footwear with a retail sale price (RSP) between Rs. 250 to Rs. 750, with the crucial condition that RSP must be indelibly marked or embossed on the footwear itself.
2. Upon examination, it was discovered that the consignments did not meet the requirement of indelible marking of RSP on the footwear. The importer was allowed to make the necessary marking to comply with the condition. However, a Show Cause Notice was issued proposing to deny the benefit of the notification, demand differential duty, and impose a penalty under Section 112(a) of the Act for not having the price embossed on the footwear at the time of filing the bill of entry.
3. The Commissioner, after dropping other proposals, imposed a penalty of Rs. 10,000 under Section 112(a) on the importer. The appeal challenged this penalty, arguing that the importer had affixed stickers and embossed prices on the boxes and footwear in good faith, and had rectified the non-compliance before clearance. The appellant contended that they did not misdeclare any aspect related to the goods.
4. The Tribunal analyzed the case records and found that while the appellant had marked the prices on the cartons and footwear, the Notification required indelible marking directly on the footwear. The Tribunal noted that the importer did not misdeclare any information in the bill of entry. Therefore, it was deemed incorrect to hold the importer liable for misdeclaration and confiscation under Section 111(m) of the Act.
5. Consequently, the Tribunal held that the penalty imposed under Section 112(a) was not sustainable in law. The order imposing a penalty of Rs. 10,000 was set aside, and the appeal was allowed in favor of the importer. The Tribunal emphasized the importance of correctly fulfilling the conditions of notifications for concessional benefits and clarified the distinction between non-compliance and misdeclaration in customs matters.