In a recent case, the Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) observed that mere omission not amounts to Mis Declaration and held that Penalty under Customs Act, 1962 is not imposable.
Cartridge King, the Appellant has filed the present appeal challenging the Order upholding the order of the adjudicating authority dated 18.11.2019 issued in the matter. The Adjudicating authority vide the said Order-In-Original ordered confiscation of the imported goods allegedly mis-declared/non-declared under section 111 (l) and 111 (m) of the Customs Act, 1962 besides enhancing assessable value and imposing a penalty of Rs. 4,00,000/- under section 112 (a) of the ibid on the appellant.
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No show cause notice was issued to the Appellant in the matter as they had waived the same, being a matter of adjudication of a live consignment. The importer vide bill of entry no. 3361656 dated 23.05.2019 imported assorted parts of cartridges, OPC drums and black toner from China. It is the case of the department that upon 100% examination of the said cargo only twenty three items were declared hence certain assorted parts of various cartridges OPC drums and cardboard boxes were not mentioned in the declaration at the time of import.
Similar allegations of non-declaration of certain items imported have also been levelled by the department in respect of imports made vide Bill of Entry No. 4089851 dated 17.07.2019. The department thus contends that the importer had not declared all the goods imported as required in the terms of section 46 of the Customs Act, and hence the imported goods are liable for the confiscation and accordingly adjudicated the matter as indicated in para above. Apart from holding the goods liable for confiscation as the department found the declaration made by the appellant is “incomplete and vague”, they further subjected him to penalty referred to supra.
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The Commissioner (Appeals) in appellate proceedings upheld the order of the adjudicating authority holding that the goods were found to be mis-declared/non-declared. Counsel for the appellant submitted that order of the lower authorities are not legal and proper in as much as they were passed in violation of the principles of natural justice ( as no investigation report by SIIB (Import ) Nhava Sheva was made over to them, prejudicing their interest.
Holding that there has been no mis-declaration by them the appellant stated that the value of the alleged non-declared goods was included in the invoice value and that there was no duty demand in respect of goods ordered to be confiscated.
The Tribunal noted that the Commissioner (Appeals) has however recorded his proposition to the effect that the fact remains that the goods upon examination were found to be mis-declared in quantity and therefore the appellant was liable for penal consequences, interalia pointing out that 5 cartons of black toner powder ( for Bill of Entry no. 336156 dated 23.05.2019 ), and empty cartridges in CKD condition ( for Bill of Entry no. 4089851 dated 17.07.2019) were not declared. As for the plea of violation of Natural Justice, the learned Commissioner (Appeals) has stated that as there was no formal show cause notice, the onus to seek the said examination report from the department was upon the appellant.
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It was viewed that there is no case left out to doubt the bonafides of the importer. At best when it is the case of the department that the value of imported goods was duly invoiced and said value of undeclared/mis-declared goods indicated in the declaration made no case for demand of additional duty, no case for any offence can be made out against the appellant.
The single member bench of Rajeev Tandon, Member ( Technical ) held that there is no merit in the claim of the department that certain goods were not declared. The mis-declaration, if any , as the department does not challenge the transaction value at best is a mere omission and no more than a technical offence, and the case of the importer that the value of all imported goods were duly invoiced strongly supports the premise. Thus, there is no case for the department to subject the appellant to any penal consequences. It is further noted from records that quantity of the components corresponding to the empty cartridge said to be not declared were duly specified in the packing list, and so also for the black toner powder contained cardboard cartons.
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It was viewed that the department has nowhere made out a case that the importer was required to declare separately each and every component of the empty cartridges under import/CKD condition. The fact that there is no duty demand despite alleged mis-declaration completely substantiates the case of the appellant.
The CESTAT set aside the order of the lower authority and allowed the appeal.
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