2014 (9) TMI 995 - AT - Customs

Evasion of custom duty - illegally import by mis-declaring the model code - Demand of differential duty - Held that - Appellant acted as a broker in import of the car. On the facts of the case no complicity has been established on the broker hence on the assumption and presumption appellant cannot be declared as a party to the alleged mis-declaration as there is no evidence on records to show that there was any declaration of model code at the time of import. The appellant cannot be implicated in the matter only for the reason that he assisted the importer to import the car. Hence I allow the appeal and set aside the penalty imposed on appellant - Decided in favour of assessee.

Summary

Issues: Mis-declaration of model code leading to customs duty evasion and penalty imposition under Sections 111(m) and 112(b) of the Customs Act, 1962.

Detailed Analysis:

1. Issue of Mis-declaration and Customs Duty Evasion:
The case involves the import of a used Toyota Land Cruiser by M/s Reuters India Pvt. Ltd., where mis-declaration of the model code was alleged to evade paying customs duty. Despite discrepancies in the model code as per examination and the report from M/s Toyota Kirloskar Motors, the vehicle was seized under Section 110 of the Customs Act, 1962. The appellant, acting as a broker, was not directly involved in the mis-declaration, and there was no evidence of any declaration of the model code at the time of import. The appellant argued that the importer is responsible for declarations, and the appellant, as a broker, should not be penalized for the mis-declaration.

2. Penalty Imposition under Sections 111(m) and 112(b) of Customs Act:
Following a show-cause notice, the appellant was penalized under Sections 111(m) and 112(b) of the Customs Act, 1962, by the lower adjudicating authority. The Order-in-Original directed the importer to redeem the car on payment of redemption fine, differential duty, and imposed a penalty of Rs. 50,000 on the appellant. The Commissioner (Appeals) upheld this order. However, the appellant contended that they had no knowledge of the model code discrepancy until it was brought to their attention by the Investigating Officer. The appellant argued that under Section 112(b) of the Customs Act, penalties can only be imposed if the person knowingly acquires or deals with goods liable for confiscation under Section 111.

3. Judgment and Decision:
After hearing both parties, the Tribunal found that the appellant, acting as a broker, was not complicit in the mis-declaration of the model code. The Tribunal noted the lack of evidence showing any declaration of the model code at the time of import. As the appellant's role was limited to assisting the importer in the import process, the Tribunal concluded that the appellant could not be held responsible solely for providing brokerage services. Therefore, the Tribunal allowed the appeal and set aside the penalty imposed on the appellant, ruling in favor of the appellant due to the lack of evidence implicating them in the mis-declaration.

In conclusion, the judgment focused on the lack of evidence linking the appellant to the mis-declaration of the model code, emphasizing the limited role of the appellant as a broker in the import process and ultimately overturning the penalty imposed under the Customs Act, 1962.