The Customs Excise & Service Tax Appellate Tribunal New Delhi ruled that the penalty imposable in case of dutiable goods cannot exceed 10% of duty sought to be evaded.

Facts 

M/s Surendra Electricals filed a bill of entry dated 20.09.2017 to clear the imported LED lights. The appraising group ordered the first check of the consignment i.e, it ordered the goods to be examined first before the bill of entry was assessed by the appraising group officers. The Special Intelligence and Investigation Branch of the customs house had also placed an alert in the customs EDI system with respect to the same consignment. The SIIB examined the goods and investigated the matter and it found that the quantity of goods actually imported was 21,660 kg against the declared weight of 15,231 kg. The number of the LEDs found were also different from what was declared under the bill of entry. 

Submissions 

Counsel for the Appellant submitted that the order passed by the Additional Commissioner (upheld by the impugned order) is illegal and void. The appellant filed the bill of entry as per the commercial invoices filed by the suppliers. Due to a mistake the supplier sent more goods.

Authorized Representative appearing for the Revenue submitted It is undisputed that quantity declared in the bill of entry was much lower than what was actually found during examination and, therefore, the goods had to be valued accordingly. Value of the imported goods was re-determined based on the values of contemporaneous imports of goods during the relevant period which has been agreed to and accepted by the assessee in writing.

Decision 

The two member bench of Dr. Rachna Gupta Member (Judicial) And P. V. Subba Rao Member (Technical) said that the goods were found to be in excess of the entry made i.e. the bill of entry and, therefore, they were liable to confiscation under section 111(l). The imported goods also did not correspond in value and, therefore, were also liable for confiscation under section 111(m). 

The bench found no infirmity in the Additional Commissioner confiscating the imported goods and Commissioner (Appeals) upholding such confiscation in the impugned order.

It was observed by the Tribunal that having confiscated the goods worth Rs. 43,42,301/- the Additional Commissioner allowed the redemption on a fine of Rs. 4,50,000/- which is about 10% of the value of the goods. Section 125 of the Act places the restriction that the amount of fine cannot exceed the market value of the goods. 

It was found by the Tribunal that the adjudicating authority had correctly held that the appellant had knowingly mis-declared the value of the quantity of the goods in the bill of entry and imposed a penalty under section 114 AA. The Commissioner (Appeals) has, in the impugned order, been correct by upheld the penalty. 

Case title: M/S Surendra Electricals V/S Principal Commissioner, Customs (Export)

Citation: Customs Appeal No. 51035 Of 2020