No section 11UA penalty if there is no case of duty short paid due to collusion, willful misstatement or suppression of facts

So-Hum Trading Company Vs Commissioner of Customs (CESTAT Kolkata)

We find that the Appellant was not availing any benefit in terms of the Exemption Notification and there was no occasion for confiscation of the live goods under Bill of Entry No.2321708 dated 05.07.2017 as the letter dated 16.07.2017 shows that the Country of Origin Certificate for these goods had been sent back to Bangladesh for rectification which was much before the DRI’s intervention on 19/22 July 2017. It is our considered view that confiscation and subsequent redemption fine for Bill of Entry No. 2321708 dated 05.07.2017 is un-warranted and cannot be sustained. Further, penalty under Section 114A of the Act cannot be sustained in respect of these consignments since there is no case of duty short paid due to collusion, willful misstatement or suppression of facts.

We observe that the Country of Origin Certificates are conclusive evidence since these are issued by the Designated Committee of Bangladesh i.e. Export Promotion Bureau, and in absence of any material on record to show that these were forged or its genuineness questioned by DRI or Indian Customs, these Country of Origin Certificates should be considered as substantive and conclusive evidence. We find support from the decision of the Tribunal in the case of RS Industries (Rolling Mills) Ltd. (supra) and Minakshi Exports (supra). In the case of Minakshi Exports, the Tribunal held that in absence of any record to the effect that the Country of Origin Certificates issued by Bangladeshi Authorities have been questioned by the Indian Authorities and any follow up after import was done in order to cancel or recall the same, denial of Exemption benefit cannot be done. We also do not find any evidence on record of any overseas enquiry with the Bangladeshi supplier or confirmation with Bangladesh Customs or Bangladeshi Authority, and therefore the SAFTA Certificate cannot be unilaterally rejected. We find that the past three Bills of Entry, the Proper Officer i.e. Assistant/Deputy Commissioner of Customs, Petrapole LCS had done value loading after due consideration and extended benefit of Exemption Notification on verification of documents like SAFTA Certificates, invoices etc. and thus we do not find any ingredient of collusion, willful misstatement or suppression of facts and accordingly the penalty imposed under Section 114A of the Act ibid is fit to be set aside.

FULL TEXT OF THE ORDER OF ITAT DELHI

ThePresent Appeals have been filed by the Appellants M/s So-Hum Trading Company and its Authorized Signatory Shri Ajay Midha against the Order-in-Appeal No.KOL/CUS(PREV)/AKR/202-204/2021 dated 24.02.2021 passed by Commissioner(Appeals) of Customs, Kolkata, whereby the learned Commissioner(Appeals) has rejected the Appeals before him and upheld the Order-in-Original, whereby imported goods were confiscated under Section 111(o), Redemption Fine of Rs.90,000/- under Section 125, demand of duty of Rs.19,67,759/- and penalty of equal amount under Section 114A for past and present Bills of Entry were upheld against the Appellant importer M/s So-Hum Trading Company and a penalty of Rupees Two Lakhs was imposed under Section 114AA of the Customs Act, 1962 (hereinafter referred to as ‘the Act’) on the 2^nd Appellant Shri Ajay Midha, the Authorized Signatory of M/s. So-Him Trading Company.

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