2003 (10) TMI 340 - AT - Customs

Summary

Issues:
Penalties imposed under Section 112(b) of the Customs Act on importers challenged. Liability of Airport Authority of India (AAI) and United Airlines for smuggling and penalties disputed. Confiscation of goods from 65 missing consignments questioned. Adjudication order covering 67 consignments, including missing ones, analyzed. Dispute over penalties imposed on AAI, its employee, and United Airlines.

Analysis:
The judgment involves three appeals challenging penalties imposed under Section 112(b) of the Customs Act by the Commissioner of Customs, Delhi. The penalties were imposed on importers of consignments containing LCD display modules for wristwatches, misdeclared as automobile parts, and metal fittings. The examination revealed discrepancies, leading to confiscation of goods and penalties. AAI, its employee, and United Airlines contested the penalties.

The show cause notice formed the basis of the adjudication order, calling for confiscation of seized goods and penalties under Sections 111(d), 112(a), and 112(b) of the Act. The notice focused on two available consignments, not the missing 65 consignments. The judgment distinguished between acts related to available and missing consignments, attributing liability accordingly.

Regarding the penalties on missing 65 consignments, AAI and United Airlines disputed their involvement in smuggling. The Commissioner held AAI liable for failing to prevent removal of goods without proper clearance, warranting penalties under Section 112. The judgment confirmed the penalties on AAI but set aside penalties on United Airlines due to lack of evidence linking them to smuggling.

The Tribunal found no merit in arguments that missing consignments did not attract penalties under Section 112. Citing precedent, the Tribunal upheld AAI's penalty for failing to prevent removal of goods, making them liable for confiscation and penalties under Section 112(a). However, the penalty on AAI's employee was set aside due to lack of evidence linking him to the missing consignments.

In conclusion, the appeals by AAI's employee and United Airlines were allowed, while AAI's appeal was rejected. The penalties on AAI were upheld, but the penalty on its employee was set aside. The judgment clarified liability for smuggling and penalties under the Customs Act, distinguishing between acts related to available and missing consignments.