The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has directed the customs duty evader to pay penalty as it was a bonafide mistake by the department in not imposing mandatory penalty.
The bench of Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) has observed that the adjudicating authority had failed to impose the mandatory penalty under the provisions of section 114A of the Customs Act in respect of one Bill of Entry.
An Intelligence was gathered that the appellant were trying to import the 100% polyester knitted cut pile fabric under two Bills of Entry by mis-declaring the item as “100% Polyester Knitted Fabric” thus by mis-declaration and mis- classification, they were trying to evade the customs duty.
The goods were examined by the SIIB officers and samples were drawn and sent to Textile Commission, New Delhi for testing. On the basis of TTC report that the fabric was 100% Polyester Cut Pile Fabric, both the consignments were seized on 27.03.2009 and 30.04.2009 respectively.
Show cause notice has been issued on 27.07.2009 to the appellant for re-classification of goods; confiscation of goods; demand of differential duty and imposition of penalty under Section 112/114A of the Customs Act, 1962.
The adjudicating authority confirmed the duty of Rs. 47,89,393/- and Rs. 15,59,363/- in respect of the two Bills of Entry and imposed redemption fine of Rs. 1,50,857000 and penalty of Rs. 47,89,393/- only under Section 114A of the Customs Act.
The appellant has filed the appeal before this Tribunal and department also filed appeal against non-imposition of mandatory penalty of Rs. 15,59,363 under Section 114A in respect of one Bill of Entry.
The basic issue to be decided is whether “100% Polyester Knitted Fabric” imported by the appellant were mis-declared and mis-classified under CTH60059000, attracting Customs duty @ of 10% Adv. or the same merits classification as “Polyester Cut Pile Fabric” under CTI 60019200 attracting customs duty at the rate of 10% Adv. or 4Rs.100/- per KG, whichever is higher.
The tribunal while ruling in favour of the department held that the appellant is liable to pay the mandatory penalty of equivalent amount of Rs. 15,59,363.
Case Details
Case Title: M/s Sarvatra International Versus Commissioner of Customs, ICD Tuglakabad, New Delhi
Case No.: Customs Appeal No. 352 of 2010
Date: 29/01/2025
Counsel For Appellant: Nagendra Yadav
Counsel For Respondent: None
