2018 (5) TMI 570 - AT - Customs

High Sea sale - mis-declaration of goods - waste and scrap or Re-Rollable Steel Scrap - Manipulation of IGM - Quantum of redemption fine and penalty - Whether in view of high see purchase and declaration in bills of entry, in all these appeals redemption fine and penalty should be reduced to 10% of the fine and penalties imposed by original adjudicating authority in each case, as held by the Hon ble Member (Judicial)? - Difference of opinion - majority order. Held that - the responsibility of filing of IGM is not with the importer. Therefore, if importer declared the correct description in the bill of entry and the description tallied with the goods than he cannot be held to have contravened the provisions of Customs Act, 1962. In view of their acceptance that on their behest, IGM was manipulated, I agree with the finding of learned Member (j) - both HMS and re-rollable steel scrap are having the same classification as sub heading 7204 49 00. However, the fact that 87% of the goods did not tally with the description of goods in Bill of Entry. Therefore, I agree with the opinion of Member (J). In view of the majority order, the impugned order is set aside and the appeal is allowed with consequential relief.

Summary

Issues:
1. Mis-declaration of goods in the Import General Manifest (IGM) and bill of entry
2. Confiscation of goods and imposition of redemption fine and penalties
3. Difference of opinion on the reduction of redemption fine and penalties

Analysis:

Issue 1: Mis-declaration of goods in the Import General Manifest (IGM) and bill of entry
The case involved importers of waste and scrap who declared goods as 'Re-Rollable Steel Scrap' in the bill of entry, but the shipping line described the goods as 'Heavy Melting Scrap' in the IGM. The importers requested an amendment to the IGM to correct the description. The mis-declaration was admitted to save customs duty, leading to the seizure of goods with an option for redemption.

Issue 2: Confiscation of goods and imposition of redemption fine and penalties
The Commissioner (Appeals) upheld the confiscation and penalties, stating that mis-declaration made the goods confiscable, and importers were liable for penalties. The Tribunal agreed that mis-declaration at the importer's behest warranted confiscation and penalties but reduced the redemption fine and penalties to 10% due to correct declarations in the bill of entry.

Issue 3: Difference of opinion on the reduction of redemption fine and penalties
One Member upheld the reduction of redemption fine and penalties to 10% due to high sea purchase and correct declarations in bills of entry. Another Member found no merit in reducing penalties, citing clear admission of abetment by the importers and excess goods detected. A third Member agreed with the reduction in penalties due to correct declarations in bills of entry but noted the mis-declaration percentage in one case. The final order set aside the impugned order, allowing the appeal with consequential relief.

The judgment highlighted the importance of accurate declarations in import documents, the consequences of mis-declaration, and the discretion of authorities in imposing penalties and fines based on the circumstances of each case.