Responsibility Of Assessee To Know The Eligibility Before Making Export Benefits Claim: CESTAT

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the appellant made a wrong claim of export benefit under MEIS, having been misadvised by the Customs House Agent (CHA).

The bench of Anil Choudhary (Judicial Member) has observed that it was the responsibility of the appellant to understand the eligibility and the conditions before making a claim for the export benefits. However, the goods were not prohibited goods. The fine and penalty are on the higher side.

The appellant/assessee filed a shipping bill for the export of "Blood Glucose Test Strips" and "Freestyle Sensor" under the MEIS scheme. On examination of the goods by the officers of ACC Export Shed the goods, blood glucose test strips were discovered to be manufactured in Japan, and the Freestyle Sensor was manufactured in the United Kingdom.

It appeared that the appellant had mis-declared the "country of origin" in the export document so as to claim the export incentives under MEIS. The classification of blood glucose test strips was declared as CTH 30069100 instead of the correct CTH 38220090.

On investigation, it was established that the appellant had deliberately mis-declared the country of origin of the goods as "India" so as to claim the export incentives and contravene the provisions of Section 50 of the Customs Act, 1962. The goods became liable for confiscation.

The appellant contended that he was wrongly advised by CHA to claim the MEIS (Merchandise Exports of India Scheme) benefits, and they, without having much idea, had claimed the benefit relying on the advice of the CHA. Only after a thorough examination of the goods did they discover that they are of foreign origin rather than Indian origin. The goods were not of a prohibited nature, and there was no intentional violation of the provisions of the export policy. In view of the venial breach or low gravity of the offence, the redemption fine imposed is disproportionate as the total amount of benefit under the MEIS was only Rs. 76,580.

The CESTAT reduced the redemption fine from Rs. 4 lakhs to Rs. 1 lakh and the penalty under Section 114(iii) from Rs. 50,000 to Rs. 25,000.

Case Title: M/s Cipra Enterprises Versus Commissioner of Customs

Citation: Customs Appeal No. 51768 of 2021 (SM)

Date: 10.01.2023

Counsel For Appellant: Advocate Vaibhav Singh

Counsel For Respondent: Authorised Representative Mahesh Bhardwaj

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