Page 303 - ELT_15th July 2020_Vol 373_Part 2

2020 ] AGARWAL INDUSTRIAL CORPORATION LTD. v. COMMR. OF CUS., MANGALORE 285
show the involvement of appellant in any way in the said misdeclaration. Fur-
ther, I find that in the present case the appellant has not claimed any preferential
rate of duty. After examining the provisions of Section 111(d) and 111(m), I find
that both the provisions are not applicable in the fact and circumstances of this
case. Further, I find that no mala fides has been brought on record on the part of
appellant so as to impose penalties on the appellant under Section 112(a) and
Section 114AA of the Customs Act, 1962. Further, I find that in the case of Orien-
tal Containers Limited v. Union of India (cited supra), the Hon’ble High Court of
Bombay in para 9 has observed as under :
“9. Having heard the Counsel on both the sides, we are of the opinion that
in the present case, it is admitted by the Customs authorities that the peti-
tioners are not party to the fraud and there was no mala fide intention on the
part of the petitioners in importing the Tin Plate/Waste instead of Tin Plate
Prime. In fact, the petitioners have paid to the foreign supplier the price of
tin plate prime and in return got tin plate waste. The petitioners have paid
the customs duty payable on Tin Plate Prime. Under the circumstances,
when the petitioners are innocent victims of the fraud played by the foreign
supplier and the petitioners have suffered double jeopardy by paying the
price and the duty payable on Tin Plate Prime, on account of the fraud
committed by the foreign supplier, the petitioners could not be held to be
guilty of violating any of the provisions of the Act and hence confiscation of
the goods is not justified. It is pertinent to note that the rate of customs duty
on Tin Plate Prime is higher than the rate of customs duty payable on Tin
Plate/Waste. As soon as the petitioners came to know about the fraud
played by the foreign supplier, they have taken effective steps and have
cleared the goods on furnishing licenses which permit clearance of Tin Plate
waste. When the petitioners had placed an order for import of tin plate
prime and have paid the price for Tin Plate Prime, no fault could be found
with the petitioners in furnishing Bill of Entry and licences for clearance of
tin plate prime. In the present case, when the petitioner has been given a
clean chit and there is no violation of the provisions of the Customs Act
committed by the petitioners and no revenue loss is caused by wrong sup-
ply of goods by the foreign supplier, the Collector of Customs was not justi-
fied in confiscating the goods.”
6.1 Further in the case of Shree Ganesh International (cited supra), the
Tribunal in para 8 has held as under :
“8. We, however, agree with the Learned Advocate that the impugned
goods are not liable for confiscation. It has not been denied by the Revenue
that the appellants have made the declaration on the Bills of Entry on the
basis of documents received by them from their foreign suppliers. The test
report of the foreign supplier is dated 9-8-2003 which clearly mentions that
the goods are non-texturised fabrics. They have also claimed that a similar
consignment imported by them from the same supplier had earlier been
cleared as non-texturised polyester fabrics which gave them the bona fide
belief that the present consignment would also be of non-texturised variety.
In similar situations, the Supreme Court has held in the case of Northern
Plastics Ltd. (supra) that the declaration is in the nature of a claim made on
the basis of belief entertained by the Appellants and therefore cannot be
said to be misdeclaration under Section 111(m) of the Customs Act. It has
also been held by the Tribunal in the case of Jay Kay Exports and Industries
(supra) that finalisation of Tariff Heading under which the goods will fall is
the ultimate job of the Customs authorities and if the Appellants have
claimed wrong classification according to his limited understanding of the
Customs Law, mens rea cannot be attributed to him. Accordingly, we hold
that in the present matters, it cannot be claimed by the Revenue that the
Appellants have deliberately misdeclared the goods with a view to avail the
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