SHREE EXPORT Vs. COMMR. OF CUS. (EXPORT), NHAVA SHEVA
LAWS(CE)-2015-1-113
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on January 01,2015

Shree Export Appellant
VERSUS
Commr. Of Cus. (Export), Nhava Sheva Respondents




JUDGEMENT

P.R. Chandrasekharan, J. - (1.)THE appeal is directed against Order -in -Appeal No. 890 (TLP -EXP)/20131(JNCH)/EXP -204, dated 30 -8 -2013 passed by the Commissioner of Customs (Appeals), JNCH, Mumbai -II. Vide the impugned order the learned lower appellate authority has rejected the claim of drawback by the appellant -exporter M/s. Shree Export by holding that the goods exported by the appellant is not wholly made of brass and hence does not fall under Entry No. 8538 02 of the Drawback Schedule and consequently, the appellant would not be eligible for the drawback @ 11% of the FOB value. Since the goods under export consist of material other than brass also, it merits classification under Entry No. 8538 99 and the eligible amount of drawback would be only 1% of the FOB value. The lower authority has also confiscated the goods under Section 113 with an option to redeem the same on payment of a fine of Rs. 50,000/ - and also imposed a penalty of Rs. 50,000/ - under Section 114 of the Customs Act, 1962. Aggrieved of the same the appellant is before me.
(2.)SHRI Pankaj B. Ganatra, Partner of the appellant -firm appeared and submitted that they were under the impression that since 90% of the item consisted of brass, it would be classifiable under Entry No. 8538 02 of the Drawback Schedule. Otherwise, there was no deliberate intention to misdeclare the goods.
The learned Assistant Commissioner (AR) appearing for the Revenue, on the other hand, submits that this is not the first occasion the appellant is making the above exports and on previous occasions also, he had resorted to misdeclaration and, therefore, confiscation of the goods along with redemption fine and imposition of penalty is justified.

(3.)I have carefully considered submissions made by both the sides. It is an admitted position that the brass electrical wiring accessories sought to be exported by the appellant predominantly consists of brass. It also contained certain metal screws which were made of materials other than brass. In order to fall under Entry No. 8538 02 of the Drawback Schedule, the item should be made 'wholly' of brass. In other words, it should be of 100% brass and nothing else. Therefore, in the present case, the appropriate classification is Entry No. 8538 99 which provides for a drawback of 1% of the FOB value of the goods exported. Therefore, the finding of the lower authorities to that extent cannot be faulted.
4.1 As regards the confiscation and imposition of penalty, in the facts of the present case, it is not warranted since the goods were made of 90% brass the appellant entertained a bona fide belief that the same merited classification under Entry No. 8538 02 and accordingly, claimed the drawback benefit. That by itself does not constitute a misdeclaration. The decision of the Hon'ble Apex Court in the case of Northern Plastic Ltd. v. Collector of Customs & Central Excise - : 1998 (101) E.L.T. 549 (S.C.) case refers. Therefore, confiscation of the goods with an option for redemption and imposition of penalty is clearly unwarranted considering the fact that the appellant is a small -scale manufacturer -exporter of brass items. Accordingly, I set aside the fine and penalty imposed on the appellant. But for the above modification, the impugned order is upheld. The amount of fine and penalty paid by the appellant shall be refunded forthwith as the provisions of unjust enrichment does not apply to fine and penalty.

Thus, the appeal is partly allowed.

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