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2016 (9) TMI 567

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..... Held that: - allowed to be re-exported. Decided partly in favor of appellant. - C/87629/13 - A/88815/16/SMB - Dated:- 26-7-2016 - Mr Ramesh Nair, Member(Judicial) Ms. Shamita J. Patel, Advocate with Shri. J.C. Patel, Advocate for the Appellants Shri. Kamal Puggal, Asstt. Commissioner(A.R.) for the Respondent ORDER This appeal is directed against Order-in-Original No. COMMR /PMS/ ADJN/19/2012-13 dated 28/3/2013 passed by the Commissioner of Customs, Airport, Mumbai, whereby Ld. Commissioner had passed following order: (1). I order confiscation of the consignment of Cut. and Polished Diamonds import weighing 709.61 Cts valued at ₹ 5,03,89,406/1 Five Cron; under Three Lakh Eighty Nine Thousand Four Hundred and Six) (CIF) under section 111 (1) 111(m) of the Customs Act, 1962. However, I give the importer M/s S. Rajiv Co. an option to redeem the said goods on the payment of Redemption Fine of ₹ 50,00,000/- ( Rs. Fifty Lakhs only) under section 125 of the Customs Act, 1962. (ii). I impose a Penalty of ₹ 5,00,000/-( Rs. Five Lakhs only) on the importer, M/s S. Rajiv Co. under Section112 (a) of the Customs Act, 1962. (iii). .....

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..... D. 3. The officers of AIU found another Invoice No. 110547 dated 30.11.2011 having the same description, value and quantity in all respect as mentioned in the invoice no. 110546 dated 30.11.2011. However, only the invoice no. 110546 dated 30.11.2011 was reflected on the B/E. The HAWB No. 3601-0255134 dated 30.11.2011/MAWB No. 589-9770 5403 dated 30.11.2011 was also showing the invoice No. 110546 dated 30.11.2011only. The officers of AIU conducted a detailed physical examination of the above said consignment under Panchnama on 5.12.2011 and found 710.10 carats of Cut and Polished Diamonds in the presence of CHA as per Annexure -A to the panchanama. The details of the packages containing Diamonds are given in the show cause notice (a) Packet No. 1:- CD/11/RNDN/SZ (Barcode No. 11014728) was having TWO(2) plastics pouches marked as CD-A CD-B and both were having bar codes on them. In CD-A there were Ten(10) small plastics pouches whose collective weight was 183.92 Cts. In CD-B there were Twelve(12) small plastics pouches whose collective weight was 103.64 Cts. Thus the weight of CPD 287.56 Cts in packet No. 1 was found to be approximately a .....

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..... d by mistake was not ordered by them. The same was clarified by the foreign supplier that on account of mistake committed by the staff of foreign supplier. The mistake was occurred due to reason that the consignment wrongly supplied to the appellant was actual meant for some another consignment for Hong Kong which was shipped at the same time as their consignment. She submits that the appellant have correctly declared the quantity of diamonds ordered by them and imported as per the invoice. Since they were not aware of excess quantity supplied mistakenly by the supplier there is no mis-declaration on the part of the appellant. She submits that Ld. Commissioner also in the impugned order mentioned that there is no malafide intention of the importer as no duty is involved. For this reason only the excess imported goods were allowed to be rexported and remaining goods were allowed to be cleared for home consumption. In support of her submission, she placed reliance on the following judgments: (a) Guru Ispat Ltd Vs. Commissioner of Customs(Port), Calcutta [2003(151) ELT 384] (b) Commissioner Vs. Guru Ispat Ltd. [2003(157) ELT A 87(SC)] .....

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..... e by both sides and perused the record. 9. The fact is not under dispute that excess quantity of cut and polished diamonds were shipped by the supplier. The appellant heavily relied upon the explanation given by the supplier that excess shipped goods to appellant was meant for supply to Hong Kong as there was similar quantity short shipped to Hong Kong party. In this regard, I observed that if such serious mistake occurred the same should have been intimated to the appellant immediately whereas all the explanations brought before the department only when the excess quantity was detected, this shows that explanation and reason for excess shipped quantity given by the appellant appeared to be afterthought. Even if it is presumed that there is bonafide mistake in shipping excess quantity of diamonds, I am of the view that for the purpose of mis-declaration mens rea is not required. When the excess goods were found as compared to the declared quantity in the invoice, it amounts to mis-declaration and consequences follow. I have gone through the judgments relied upon by the Ld. Counsel, firstly every case is based on the independent .....

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..... violation warranting penal action. That is a case of misdeclaration of quantity and value. They have also relied on judgment Madras High Court reported in 2007 (207) E.L.T. 346 (Mad.) wherein it is held that in case of misdeclaration and undervaluation of goods mens rea is not required for imposition of punishment under Customs Act, 1962 . Similarly Hon ble Supreme Court in the case of M/s. Pine Chemical Suppliers - 1993 (67) E.L.T. 25 (S.C.) has also held that in case of misdeclaration of description and value of imported goods, question of mens rea not relevant for liability to confiscation and penalty under Sections 111(m), 112 and 125 of the Customs Act. Therefore for invoking penal provisions under Customs law, mens rea is not pre-requisite. (c) P. BHASKAR NAIDU Versus COMMISSIONER OF CUSTOMS, CHENNAI [2013 (298) E.L.T. 248 (Tri. - Chennai)] 8 . The details of the case as narrated in the show cause notice have been taken into account by the Adjudicating Commissioner as recorded in the adjudication order. The prohibition in respect of export of red sander logs under the Foreign Trade Policy provisions and the contravention of the same in this case has not been ch .....

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..... by Dungarmal (high seas seller). They produced the aforesaid invoices issued by ODC to Dungarmal and the value mentioned in those invoices was declared in the Bs/E. Alfa has a case that they were not aware of what had transpired between Dungarmal and ODC or of the transactions between them except that the price mentioned by ODC in the above invoices was recovered from Dungarmal. In this circumstance, according to Alfa, it cannot be said that they misdeclared the value of the goods. On this ground, Alfa has resisted the confiscation and penalty. It is for the person filing the B/E to ensure the correctness of his declaration therein it was open to Alfa to produce invoices (if any) issued by Dungarmal (high seas seller). The Revenue has established that Dungarmal paid a higher price to ODC than what was mentioned in the aforesaid invoices. In the ordinary course of trade, Dungarmal would not sell the goods to Alfa at a price lower than what they paid to the onginal supplier (ODC). Looking from this angle, we have to hold that Alfa declared a lower value for the goods in the Bs/E than what they paid to Dungarmal at the high seas. In other words, Alfa should be held to have undervalued .....

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..... the goods confiscated. Redemption fine also serves the same purpose as a penalty on the importer. Therefore, considerations that weigh against the penalty imposed under Section 112 of the Act should govern also the fine imposed. In the absence of a finding of wilful misdeclaration of the offending goods as falling under grade 4A to evade payment of ADD, a nominal fine should suffice. A fine of ₹ 25,000/-, I find, will more than meet the ends of justice in this case. 4 . I find that in the Akbar Badruddin Jiwani v. Collector of Customs reported in 1990 (47) E.L.T. 161 (S.C.), the Apex Court observed as under : 58. In the present case, the Tribunal has itself specifically stated that the appellant has acted on the basis of bona fide belief that the goods were importable under OGL and that, therefore, the Appellant deserves lenient treatment. It is, therefore, to be considered whether in the light of this specific finding of the Customs, Excise Gold (Control) Appellate Tribunal, the penalty and fine in lieu of confiscation required to be set aside and quashed. Moreover, the quantum of penalty and fine in lieu of confiscation are extremely harsh, excessive and unr .....

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