Pansuriya Impex vs Commissioner Of Customs (Csi) Airport

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI

COURT No.II

APPEAL No.C/86573/15

(Arising out of Order-in-Appeal No.MUM-CUST-PAX-APP/87/15-16 dated 08/07/2015 passed by Commissioner of Customs (Appeals), Mumbai)

For approval and signature:

Honble Mr. Raju, Member (Technical)

1. Whether Press Reporters may be allowed to see :No 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 :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy :Seen of the Order?

4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================

Pansuriya Impex Appellant Vs. Commissioner of Customs (CSI) Airport, Respondent Mumbai

Appearance: Shri.J.S.Sanghvi, Consultant for appellant Shri.M.K.Mall, Asst. Comm. (AR), for respondent

CORAM: Honble Mr. Raju, Member (Technical)

Date of Hearing : 30/10/2015 Date of Decision : 30/10/2015

ORDER NO

Per: Raju

1. The appellant, M/s.Pansuriya Impex exported cut and polished diamond (CPD) under AC/PCCC pm 14/10/2011. In one of their consignments which they exported in Sl.No.302 the value was declared as US $ 25000 per carat and a total value of a 3.02 carat diamond was declared as Rs.75,500/-. During the examination at the PCCC, it was found that the correct value should have been US $ 2500 per carat and a total value should have been US $ 7500 for the entry No.302 of the packing list. The Revenue confiscated the diamond and imposed a penalty under Section 113 (h) (i) of the Customs Act, 1962. Penalty under Section 114 AA of the Customs Act, 1962 were also imposed. The goods were offered to be released on payment of redemption fine of Rs.2.50 lakhs. While issuing this order, the original adjudicating authority mistakenly calculated the differential value as US $ 22,500 against the actual differential value of US $ 67,500 due to clerical error. On realizing this mistake, Revenue reviewed the order seeking enhancement of value and corresponding enhancement of redemption fine and penalties. The appellant did not challenge this order of the original authority before the Commissioner (Appeals). The commissioner (Appeals) enhanced the redemption fine to Rs.7,50,000/-. The penalty under Section 114 (iii) to Rs.3.00 lakhs and penalty under Section 114AA to Rs.1.00 lakh. The appellants are in appeal against the said order.

2. The appellant argued that they could not have benefited by any over valuation as there was no duty to be charged, there was no prohibition on these goods and there was no export benefits on this consignment. Moreover, all goods were checked on first check basis and it was not possible for them to misdeclared. They claimed that this is purely a clerical mistake as it was only in one of the 391 entries of the packing list. They also challenged the findings of the original adjudicating authority which were not challenged before the Commissioner (Appeals). They also claimed that it is possible for the department to correct error instead of imposing penalties. In support of their claim they relied upon the decision of this Tribunal in the case Badri Prasad & Sons Pvt. Ltd., Vs. CC, Delhi  1995 (80) ELT 624 (Tribunal) and Reiter India Pvt. Ltd., Vs. CC (Import), Nhava Sheva  2014 (309) ELT 277 (Tri-Mumbai).

3. Learned AR argued that the appellants have not challenged the order of the original adjudicating authority and therefore, they cannot challenge the findings of the said order. They argued that the value wrongly mentioned in all the documents, namely, invoices, packing list, etc. He also relies on the impugned order.

4. I have considered the rival submissions. I find that there was no apparent benefit to the appellant by doing misdeclaration of the value as there is no duty, no prohibition and no export benefit that can be claimed. All the documents are interconnected documents. Documents like packing list being original documents are basis for preparing the invoices and shipping bills. An error in packing list will carry itself into invoice and consequently into shipping bill. The goods are examined on first check basis and I find that in the packing list entry just above entry No.302, in which the error had occurred, is also an entry of diamonds of size 3.01 carat and the price mentioned is US $ 2500 per carat. The total price of the 3.01 carat diamond is US $ 7525/-. The first check examination would have easily detected this error when entries No.301 & 302 are compared. In one entry in 391 entries of the packing list, there is an extra zero added accidentally. There is no way it could have been intentional.

5. On the other and I noticed that the appellant have not challenged the order of the original adjudicating authority before the Commissioner (Appeals). In view of that the penalties imposed and redemption fine levied in that order becomes final. In view of the facts and circumstances I set aside the order of the Commissioner (Appeals) in so far as it relates to enhancement of redemption fine and penalty.

6. Appeal is partly allowed.

(Dictated in Court)

(Raju) Member (Technical)

pj

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