Custom, Excise & Service Tax Tribunal
M/S.C.M. Hussain Mubarak & Co vs Commissioner Of Customs ... on 30 November, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
C/256/2012
[Arising out of Order-in-Appeal No.C. Cus No.486/2012, dated 22.06.2012 passed by the Commissioner of Customs (Appeals), Chennai]
1. Whether Press Reporters may be allowed to see the Order
for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in
any authoritative report or not? :
3. Whether the Member wishes to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s.C.M. Hussain Mubarak & Co.
Appellant
Versus
Commissioner of Customs (Sea-Exports), Chennai
Respondent
Appearance:
Shri T. Sundaranathan, Adv. Shri K.S.V.V. Prasad, SDR For the Appellant For the Respondent CORAM:
HONBLE SHRI MATHEW JOHN, TECHNICAL MEMBER Date of hearing : 30.01.2013 Date of decision : 30.01.2013 Final Order No.____________ The appellant filed Shipping Bill No.3473273, dated 26.08.2009 for export of 20,539.50 sq. ft. of goods declared as Bufflight Burnish Upper Finished Leather under claim for drawback. On examination, the Customs officers were of the view that 4803 sq.feet of the goods did not confirm to the description declared in the shipping bill. Here, it is relevant to note that there was export duty of 60% on unfinished leather and there was also restriction on its export, whereas finished leather was allowed to be exported free of any restriction and without any export duty.
2. Samples were drawn from the consignments and forwarded to the Central Leather Research Laboratory (CLRI) Adyar, Chennai. They gave a report that the description of the goods did not satisfy the norms and condition of Public Notice No.3-ETC(PN)/92-97, dated 27.05.1992 for the type of finished leather as declared. Against the above background, the adjudicating authority confiscated 4,803 sq.ft. of consignments valued at Rs.2,62,041/- and allowed its redemption on payment of a fine of Rs.35,000/-. Further, a penalty of Rs.5,000/- was imposed under Section 114 of the Customs Act, 1962. The exporter paid the redemption fine and penalty and took back the entire consignment without exporting it, owing to mix-up that has happened at the time of packing. The Revenue was aggrieved that the penalty imposed on the appellant was very meager and, therefore, filed an appeal with the Commissioner (Appeals). The Commissioner (Appeals) held that under Section 114, there is no discretion for imposing penalty less than the duty amount sought to be evaded and consequently, he imposed a penalty of Rs.1,58,413/-. Aggrieved by the order of Commissioner (Appeals), the appellant has filed this appeal.
3. The learned counsel for the appellant submits that the goods sought to be exported was, in fact, finished leather and the only mismatch was that it did not fit into the type of finished leather, which was declared in the shipping bills. Therefore, the case made out that the appellants had attempted to evade export duty is not correct. In his opinion, the original penalty of Rs.5,000/- is more than what was warranted.
4. The learned counsel for the appellant further submits that the interpretation of the Commissioner (Appeals) that there is no discretion vested in the officers in imposing penalty under Section 114 of Customs Act is wrong because Section 114 clearly sets out a maximum penalty that can be imposed under the said section and penalty is to be decided by the adjudicating officer considering the gravity of the offence. He relies on the decision of Commissioner of Customs, Tuticorin Vs Sai Copiers reported in 2008 (226) E.L.T.486 (Mad.). He further points out that at the time of filing the appeal before the Commissioner (Appeals), the department was relying on this decision with the prayer that at least 5% of the value of the goods be imposed as penalty and, therefore, the Commissioner (Appeals) had gone beyond the prayer of the Revenue before the Commissioner (Appeals) and hence, the penalty imposed is excessive.
5. Opposing the prayer of the learned counsel for the appellant, the learned AR for the Revenue submits that since the appellants have accepted the misdeclaration of goods and took back the goods out of Customs custody accepting the mis-declaration, they cannot re-contest the issue, that there was mis-declaration. Testing the goods showed absence of wax coat, absence of burnishable effect and absence of dyeing imparting medium/dark shade. These goods could be considered as finished leather only in terms of the Exemption Notification, which in turn, depends upon Public Notice No.3-ETC(PN)/92-97, dated 27.05.1992, issued by the DGFT. He further submits that the penalty of Rs.5,000/- imposed on the appellant is very low, considering the fact that the duty said to be evaded was Rs.1,58,413/-.
6. Considered the arguments from both sides. I do not agree with the arguments that the penalty to be imposed under Section 114 has to be equal to the duty sought to be evaded and this issue has already been decided by the Madras High Court in Sai Copiers (supra) and hence, does not have to be dealt with in detail. But, considering the submissions of both sides, I am of the view that the penalty imposed by adjudicating authority is slightly on the lower side and the penalty imposed by Commissioner (Appeals) is excessive. Therefore, I reduce the penalty amount to Rs.9,000/-. The appellant is to pay the differential amount of Rs.4,000/- (Rupees Four Thousand only)Accordingly, the appeal is allowed partially.
(Dictated and pronounced in open court)
(MATHEW JOHN)
TECHNICAL MEMBER
ksr
30-01-2013
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