By TIOL News Service

AHMEDABAD, OCT 28, 2016: THE Appellants imported 832.310 MT of Butyl Acrylate Monomer (BAM) from M/s Marumeni Chemicals Asia Pacific Pte Ltd, Singapore . They cleared 620 MT of said imported goods at concessional rate during the period 23.11.2006 to 19.12.2006 against 11 ex-bond Bills of Entry availing benefit of Notification No.73/2005-Cus, dt.22.07.2005.

On the basis of investigations by DRI officers, it was revealed that the country of origin declared by the importer was incorrect.

Accordingly, on the basis of further investigation and evidences collected from overseas agencies, SCN was issued for recovery of differential duty and imposition of penalty.

On adjudication, the demand was confirmed and penalty was imposed u/s 114A of Customs Act, 1962 and, therefore, the importer is before the CESTAT.

It is submitted that the Appellant is disputing the imposition of penalty only and not the duty; that the yare a regular importer from the said overseas supplier and were not aware of the mis-declaration of country of Origin and not a party in any manner to the said offence committed by the overseas supplier; hence, penalty u/s 114A of Customs Act, 1962 is unwarranted. Moreover, the Appellants are entitled to exercise the option to pay 25% of the penalty imposed u/s 114A of CA, 1962.

The AR while supporting the order of the adjudicating authority fairly accepted that the benefit of option to discharge 25% of penalty imposed had not been allowed to the Appellant and he had no objection in allowing the same.

The Bench observed -

+ Appellant has not disputed the payment of differential duty for clearance effected during Nov. & Dec. 2006. However, the issue needs to be addressed is whether the Appellant's approach was bonafide in declaring the country of origin as Singapore and availing the benefit of Notification No.73/2005-Cus.

+ In support of their bonafideness, the Appellant argued that on 29.12.2006, they themselves voluntarily approached the Commissioner of Customs Kandla indicating their intention to discharge differential duty, hence, no malafide should be attached to their action in penalizing them under Section 114A of Customs Act, 1962.

+ The Revenue countering the said argument submitted that soon after the initiation of investigation against other importers who imported the goods from the same source on 28.12.2006, the Appellant chose to come to Commissioner of Customs, Kandla indicating their intention to pay the differential duty, whereas for two months i.e. Nov. & Dec. 2006 continuously they have cleared the goods by availing the benefit of said notification and not informed the department. We find force in the contention of the Revenue.

+ Accordingly, we confirm the penalty imposed by the learned Commissioner on the Appellant under Section 114A of Customs Act, 1962.

+ However, the Appellants are entitled to discharge 25% of the penalty, which option has not been allowed to them in the impugned order.

The appeal was partly allowed.

(See 2016-TIOL-2805-CESTAT-AHM)