No Deliberate Mis-Declaration In Bill of Entry To Short Pay Custom Duty: CESTAT Quashes Confiscation, Penalty

The bench of Anil Choudhary (Judicial Member Judicial) has quashed the confiscation and penalty on the grounds that the appellant has suo motu approached the Department for making necessary rectifications in the Bill of Entry with regard to the classification and also offered to pay the differential duty.

The appellant/assessee is in the business of manufacturing ceramic tableware and is located in Jaipur. The appellant is a regular importer of calcium phosphate falling under chapter heading 28352690. In the regular course of business, the appellant imported calcium phosphate and filed a bill of entry.

However, due to some clerical error, the description of goods was mentioned as Apatite (GR) Calcium Phosphate, falling under chapter heading 25102030. The mistake occurred due to an error in the shipping documents. The mistake was also in the commercial invoice.

The appellant discovered the error in filing the Bill of Entry, and accordingly approached the Revenue for correct classification and payment of duty, pointing out the mistake.

The appellant prayed for rectification in the Bill of Entry and offered to pay the differential amount of customs duty and GST.

The officers of Customs examined the consignment of a Bill of Entry in which they found that the tag affixed on the jumbo bag mentioned the description of the goods as calcium instead of apatite (GR) calcium phosphate.

The department stated that as the appellant was a regular importer of calcium phosphate, they had deliberately misclassified the goods in the Bill of Entry to pay lower customs duty.

The department believed that it was a case of deliberate mis-declaration and, accordingly, the goods were liable to confiscation under Section 111 (d), (l), (m), (n) and (o) of the Customs Act. The goods were put under seizure. The appellant was liable to a penalty under Section 112 (a)(ii) and Section 114AA. The differential duty was also payable.

The Additional Commissioner of Customs held that the appellant had intentionally filed the Bill of Entry under the wrong description and classification. Accordingly, the goods were liable for confiscation under Section 111 (d), (l), (m), (n) and (o) of the Customs Act. A penalty was also imposed.

The appellant contended that the Bill of Entry was filed by the Clerk of the Appellant, who filed the Bill of Entry based on the documents like the commercial invoice and bill of lading. However, as soon as the matter came to the knowledge of the Senior Officer of the appellant company, they immediately filed an application for rectification. The appellant offered to pay the differential duty even before any inspection or dispute was raised by the Customs Department.

The appellant contended that the appellant is a regular importer of calcium phosphate and has already been granted the "No Objection Certificate" by the Drug Controller Department. Thus, there was no reason for the appellant to deliberately mis-declare the description of goods and classification. Thus, there is no reasonable basis available to the Revenue to draw an adverse inference against the appellant.

The CESTAT held that it was a case of simple clerical error and that there was no case of contumacious conduct on the part of the appellant.

Case Title: M/s Ceramic Tableware Pvt. Limited Versus Commissioner of Customs

Citation: Customs Appeal No. 50720 of 2021-SM

Dated: 17.06.2022

Counsel For Appellant: Advocate Bipin Garg

Counsel For Respondent: Authorised Representative Tamanna Alam

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