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2016 (9) TMI 567 - CESTAT MUMBAI

2016 (9) TMI 567 - CESTAT MUMBAI - TMI - Confiscation of consignment - under-invoicing of import of Diamonds - Bill of Entry not accompanied with packing list - option to pay redemption fine - section 125 of the Customs Act, 1962 - imposition of penalty - Section 112 (a) of the Customs Act, 1962 - Held that: - if serious mistake occurred the same should have been intimated by the appellant immediately whereas all the explanations brought before the department only when the excess quantity was de .....

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antum of fine and penalty - confiscation justified - quantum of fine and penalty reduced. - Re-export of excess found goods - 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-Origina .....

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em 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). I direct assessment of the declared quantity of the Cut & Polished Diamonds vide B/E No.00160 dtd 2.12.2011 under invoice no. 110546 dated 30.11.2011 with Assessable Value of ₹ 3,54,82 .....

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11 at PCCCC, Bandra-Kurla Complex, Bandra(E), Mumbai, on the basis of specific information with regard to under invoicing of Import of Diamonds. On enquiry from Examination officer on duty, it was known that the above mentioned Bill of Entry was not accompanied with packing list and hence, the consignment was not cleared on 2.12.2011 and the detailed packing list was asked for from the CHA and a remark was put to that effect on the reverse of the original copy of the said Bill of Entry. He had a .....

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of entry was filed for clearance of one parcel under Marks 589 9770 5403(MAWB No) and No. 3601-0255134(HAWB No.) containing Cut and Polished Diamonds and having a declared weight of 494.730 CTS under RITC 71023910. The Assessable Value was mentioned as ₹ 3,54,82,085/-. The Consignor of the goods was Jayam n.v. Schupstraat 18/20, 2018 Antwerp, Belgium as on Invoice No. 110546 dated 30/11/2011. The said Invoice of Polised Diamonds had the following details: 1) CD-11RND N/SZ 287.54 Carats @ 1 .....

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0.11.2011 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& .....

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cation and contained further smaller plastics pouches as per the details given in the SCN. The declared weight for second packet was 207.17 cts in the invoice. However, the collective weight of the second packet was found to be 423.07 cts. 4. Thus on examination, 215.37Cts (approx) of Diamonds valued at Rs. ₹ 1,52,93,424/- were found in excess, which were not declared on the invoice and on the relevant bill of entry. Thereafter, the total quantity of the Cut and Polished diamonds totally w .....

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how cause notice to impose penalty under Section 112 and 114AA of the Customs Act, 1962. The adjudicating authority has confiscated whole quantity of diamonds imported by the appellant and imposed redemption fine of ₹ 50 lacs under Section 125 of the Customs Act, 1962. A penalty of ₹ 5 lacs was imposed under Section 112(a). Excess diamonds i.e. 214.88 carats valued of ₹ 1,52,58,629/- was ordered allowed to be re-exported to the supplier after payment of redemption fine and pena .....

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arious statements of partner of the appellant Shri. Shreyas Zaveri wherein he categorically stated that excess diamonds supplied 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 su .....

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oods 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)] (c) Aniketa Krishna International Vs. Commissioner of Customs, Jaipur[2012(280) ELT 131] (d) Makali Metals Pvt ltd. Vs. Commissioner of Customs, Raigad, [2001(138) ELT 607] (e) Oriental Containers Ltd.Vs. Union of India[200 .....

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d[2010(250) ELT 310] She further submits that there is no duty on the import of diamonds therefore no malafide intension can be attributed in excess quantity shipped by the supplier. For this reasons also the goods were not liable for confiscation. Hence the redemption fine and penalty is not warranted. 7. Shri. Kamal Puggal, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that for the charge of mis-declaration, malafide .....

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y issue as regard the mistake committed in excess quantity shipped therefore the explanation given subsequent to the detection of excess import is afterthought, therefore Ld. Adjudicating authority has rightly confiscated the goods. In support of his submission, he placed reliance on the following judgments: (a) Shree Corporation Vs. Commissioner of Customs, Mumbai[2004(166) ELT 471(Tri. Mum)] (b) Rosy Blue (India) Pvt Ltd. Vs. Commr. Of Customs, CSI, Airport, Mumbai[2015(317) ELT 331(Tri. Mumba .....

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e 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 de .....

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ortion are reproduced below: (a) VIJAYBHAV Versus COMMISSIONER OF CUSTOMS, AIRPORT, MUMBAI[2014 (313) E.L.T. 506 (Tri. - Mumbai)] 9.7 Section 111(d) of the Customs Act provides that any goods which are imported or attempted to be imported or are brought within the Indian Customs Waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force, shall be liable to confiscation . Thus prohibition could be imposed under t .....

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ishment Licence. If the diamonds are imported without such licence, then import would be in violation of the restriction. Section 2(33) of the Customs Act defines prohibited goods as follows :- prohibited goods means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been comp .....

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tual Fund to support its contention of detection of 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.) h .....

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unt 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 challenged by any one. Further, the goods entered for export and declared in the relevant shipping bill were granite cobble stones, whereas actual goods found in the container brought to the customs area for export was red sander logs. Hence, the contravention of Se .....

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ld that for mis-declaration in respect of imported goods resulting in contravention of Section 111(m), the question of mens rea is not relevant for liability to confiscation and penalty but, only for quantum of fine and penalty imposable. The ratio of the said decision of the Hon ble Supreme Court is squarely applicable for similar provisions in respect of export goods under Section 113(i) and 114 of the Customs Act, 1962. For the purpose of export, the exporter is required to truthfully declare .....

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07) E.L.T. 346 (Mad.). (d) DUNGARMAL PRUTHVIRAJ & CO. Versus COMMISSIONER OF CUS. (P), MUMBAI[2011 (272) E.L.T. 606 (Tri. - Mumbai)] 12. It is also on record that the goods covered by Invoices No. 93288 and No. 93292, which were purchased by Dungarmal from ODC, were sold to Alfa at the high seas. The relevant Bills of Entry were filed by Alfa for clearance of the goods and the demand of duty is upon them. Though there has been no representation for Alfa before us, we have perused the relevan .....

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is 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, Dung .....

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the value of the goods with intent to evade payment of appropriate duty, Alfa rendered themselves liable for penalty under Sec. 112 of the Act. The ld. SDR has rightly submitted that no mens rea requires to be established against an importer before impositon of penalty on him under Sec. 112 of the Act. He has, in this connection, relied on the High Court s judgment in Commissioner of Customs (Export), Chennai v. Bansal Industries [2007 (207) E.L.T. 346 (Mad.)], wherein the Hon ble High Court co .....

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ly confiscated. It is enough if the goods are found to be liable to confiscation under Sec. 111 of the Act. Misdeclaration of the value of the goods rendered it liable to confiscation and its importer liable to penalty. The only question to be considered is whether the quantum of penalty imposed on Alfa by the Commissioner is reasonable. It is pointed out by the ld. SDR that the enhanced value of the goods covered by the two invoices is over ₹ 29 lakhs. We find that a penalty of ₹ 2 .....

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E.L.T. 720 (Tri. - Chennai)] 3.3 As the offending goods are liable for confiscation, fine is justified in law. A fine for redemption of goods confiscated levies a monetary charge on the importer of 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 goo .....

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, 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 unreasonable bearing in mind the bona fides of the Appellant, as specifically found by the Appellate Tribunal. 59. W .....

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= 1970 (1) SCR 753 - by this Court that :- The discretion to impose a penalty must be exercised judicially. A penalty will ordinarily be imposed in cases where the party acts deliberately in defiance of law, or is guilty of contumacious or dishonest conduct, or acts in conscious disregard of its obligation; but not, in cases where there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the man .....

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