2022 (5) TMI 1317 - AT - Customs

Mis-declaration of imported goods - Superior Kerosene Oil (SKO) - rejection of declared value - redetermination of assessable value - confiscation - redemption fine - penalty - HELD THAT - The matter needs to be reconsidered by the adjudicating authority after allowing re-test as requested by the appellant vide their letter dated 17.01.2020. The matter is remanded back to the adjudicating authority to decide the matter after causing re-test as requested by the appellant - appeal allowed by way of remand.

Summary

Issues:
1. Misdeclaration of imported goods as 'Solvent Paint' instead of 'Kerosene (SKO)'
2. Rejection of request for re-testing of samples
3. Confiscation of goods under Customs Act, 1962
4. Imposition of penalties on the importer

Issue 1: Misdeclaration of imported goods
The appellant declared the imported goods as 'Solvent Paint' under CTH 38140010, but after testing, it was found to be 'Kerosene (SKO)' as per IS:1459:2018. The Additional Commissioner held that the goods were misdeclared, leading to liability for confiscation under Section 111(m) of the Customs Act, 1962. A show cause notice was issued, and the order-in-original confirmed the misdeclaration. The appellant argued that the goods were solvent paint, citing previous tribunal decisions. The Tribunal noted the need for re-testing and remanded the matter back to the adjudicating authority for a decision post re-testing.

Issue 2: Rejection of re-testing request
The appellant's request for re-testing of samples was summarily denied without specific reasons, citing Circular No. 30/2017-Cus. The Circular provides guidelines for re-testing of samples under certain conditions. The Tribunal observed that the denial of re-testing should generally not occur without reasonable grounds, as specified in the Circular. The Tribunal emphasized the importance of re-testing in trade facilitation and directed the adjudicating authority to allow re-test as requested by the appellant.

Issue 3: Confiscation of goods under Customs Act, 1962
The Additional Commissioner ordered the confiscation of the goods, namely 'kerosene,' imported under a specific Bill of Entry, under sections 111(d) and 111(m) of the Customs Act, 1962. The order allowed the importer an option to redeem the confiscated goods upon payment of a redemption fine and applicable duty. The Tribunal's decision to remand the matter for re-testing implies a reconsideration of the confiscation order based on the revised test results.

Issue 4: Imposition of penalties on the importer
Penalties were imposed on the importer under various sections of the Customs Act, 1962, totaling Rs. 55,00,000. The penalties were imposed for misdeclaration and other violations. The Tribunal's decision to remand the matter for re-testing also impacts the imposition of penalties, as the final decision on penalties would depend on the re-test results and the revised classification of the imported goods.

In conclusion, the Tribunal allowed the appeal, remanded the matter for re-testing, and directed a speedy disposal of the case within three months. The decision emphasized the importance of re-testing in resolving the misdeclaration issue and determining the appropriate classification of the imported goods.