Penalty on Goods Imported from Bangladesh as no Customs duty was short paid, SAFTA Certificate duly verified

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench quashed penalty on Goods Imported from Bangladesh as no Customs duty was short paid due to collusion, willful misstatement, and the South East Asia Free Trade Agreement (SAFTA) Certificate was duly verified.

Facts of the case:-

The Appellant importer, M/sSo-Hum Trading Company was importing goods, namely 100% Polyester quilt cover from Bangladesh and intended to clear it at concessional rate of duty by availing the benefit of South East Asia Free Trade Agreement (SAFTA) in terms of Notification dated 09.11.2011, for which Country of Origin certificate under SAFTA was obtained from Bangladesh by declaring incorrect data about the quantum of non-originating contents of the said quilt covers and thus it was not eligible for SAFTA benefit.

The Directorate of Revenue Intelligence (DRI) intimated the Assistant Commissioner of Petrapole LCS on 19.07.2017 and a team of officers visited Petrapoleon on 22.07.2017. On examination, the goods were found as per declaration along with a letter dated 16.07.2017 by which the Deputy Commissioner of Petrapole LCS was requested to allow warehousing as the SAFTA Certificate had been sent back to Bangladesh for rectification.

The Appellants contended that penalty under Section 114A of the Act can be imposed only if duty is short paid due to collusion or any willful misstatement or suppression of facts, which is not the case in the instant appeal under consideration. He further states that no new documents had been found during the investigation and all the relevant documents like invoices, Country of Origin Certificate duly authenticated by the Bangladesh Chamber of Commerce and Industry, viz. Export Promotion Bureau, Bangladesh, etc. were always available with the Proper Officer. Accordingly, he submits that penalty under Section 114A is not at all warranted on the Appellant importer M/s So-Hum Trading Company.

Conclusion:-

The Coram of Judicial Member, P.K.Choudhary and Technical Member, P.V.Subba Rao found 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 as the letter 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. The confiscation and subsequent redemption fine for Bill of Entry 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.

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